Similarly, 99% of respondents believe PE interest in North America will grow. Medium-sized companies looking to service debt, merge, or sell assets are providing opportunities for funds looking to bolster their existing portfolios.
“The US shale market saw an influx of PE resources before prices dropped,” said Deborah Byers, E&Y US energy leader. “And as liquidity, asset-based lending, and reserve-based lending continue to decrease, companies will increasingly look to alternative financing like PE.”
PE firms are set to become more involved in the midstream and upstream segments over the next 2 years, with 44% of respondents considering the two sectors as their best opportunity for return on investment.
“Many of the recent upstream bankruptcy filings are balance sheet fixes,” noted Byers. “Once these companies emerge from restructuring, they will reevaluate their assets which may lead to increased sales in the market.”
Amid depressed oil prices, PE firms are positioning to provide short-term and long-term financial solutions across the industry, with 63% saying they will provide value to corporates through growth capital.