Chart of the week: The uncertain future of oil and gas fundraising

Closed-ended private equity fundraising targeting infrastructure is on the up while oil and gas vehicles appear set to lose out on investor capital.


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The current down-cycle in the oil and gas sector has left private equity energy investors feeling the pressure to emphasise operational value creation, as reported by Private Equity International this week.

PEI’s Research & Analytics team have analysed whether this has affected fundraising for closed-ended private equity vehicles investing in infrastructure-focused companies.

In 2015, private equity funds focused on the infrastructure market gathered $39.47 billion from the close of 51 funds. An increase of $2.69 billion on the previous year’s total suggests that fundraising in the infrastructure market is on an up-cycle.

While the largest vehicle to close in 2015 was EnCap Energy Capital Fund X, raising $6.5 billion to invest into the upstream oil and gas industry in North America, the significant drop in the price of oil at the end of last year is sure to affect where investors choose to place their capital in the future.

Funds closing in recent months will largely be unaffected by such a new development in the oil and gas industry. However, we are likely to see a drop-off in fundraising for this sector over the next couple of years as investors look to gain returns from other areas of the infrastructure market.

So far this year, five infrastructure-focused private equity funds have held a final close, collecting $7.08 billion from investors. The largest is Stonepeak Infrastructure Fund II, which gathered $3.5 billion for North American investments in sectors such as energy, power and renewables, transportation, utilities, water.