Week in Review: Energy, SEA, and M&A Tactics

In honor of last week’s Fashion Week here in New York City, we decided to look into the trendy areas of PE. Midstream energy companies and smaller Asian neighbors take the prize, attracting recent attention from many firms. As a consequence, the focus on smaller Asian countries has left China with a raw deal environment. And, to complicate matters, many pension funds seem to be losing interest in PE. We end the review with a discussion of the tactical value of M&A and the diminishing interest in large IPOs.

Wisconsin Pension Loses Taste for PE Giants: Some pension funds seem to be losing interest in private equity. Just last week, the State of Wisconsin Investment Board sold more than $1 billion worth of fund interests. Similar sales are expected to occur in Illinois, Texas, and NYC. According to these pension funds, PE’s recent interest in “asset aggregation and going public or selling stakes to third parties” is creating a misaligned interests between GPs and LPs. Are the tides finally turning on the PE-pension relationship?  

Latest Trend Among Private Equity Firms: Midstream Energy Companies: Oil and gas distribution companies are in. At least according to the $5.1 billion invested by PE firms in the past few months. The investment focus may likely be a continuation of the billions already invested in oil and gas exploration and production companies. However, it could also be an indication of changing LP investment tactics and interests. 

China Beware: Private Equity Takes Notes of Smaller Asian Neighbors: Oil and gas distribution companies are in. At least according to the $5.1 billion invested by PE firms in the past few months. The investment focus may likely be a continuation of the billions already invested in oil and gas exploration and production companies. However, it could also be an indication of changing LP investment tactics and interests.  

A few other interesting trends to consider in the coming months: M&A is more tactics than strategy and large IPO volume has dropped around the world.