In November 2019, Australian infrastructure player IFM Investments paid $10.3 billion to acquire Buckeye Partners and take it private. For instance, infrastructure funds have stepped in and taken private equity's place."įenn flagged Buckeye Partners as a stand-out example. "Some of that slack has been taken up by other investor types. "The overall pool of private equity-sourced capital has diminished," agreed Tim Fenn, partner at Latham & Watkins. Some of the largest private equity providers to the sector have taken a step back from investing in the space, he said. "Generally speaking, private equity interest in energy in recent years has been way down," said Creighton Smith, partner at »Vinson & Elkins. Today the index stands close to 491.Ĭhallenging market dynamics have combined with ESG mandates to create a tough fundraising environment for existing and prospective private equity players. Unsurprisingly the highs and lows correlate closely to crude oil's zeniths and nadirs. The index climbed as high as 863 in September 2014 but dived as low as 155 in March 2020. Midstream Energy Index, consisting of 31 constituent public midstream entities, has seen many highs and lows since its launch in 2013. But potential roadblocks abound.Ĭonsider the state of the midstream space. Midstream private equity sponsors have begun maneuvering their portfolio companies to take advantage of these shifts. Meanwhile, midstream operators extol the steady, toll booth-like virtues of their assets that provide yield over an extended time frame.īut changes are coming, and they have the potential to transform the midstream sector in ways that reshape traditional relationships between upstream and midstream players. ![]() Upstreamers are wont to describe themselves as wildcatters that take big risks and generate big rewards. ![]() But they are siblings with much different personalities. Like conjoined twins, the fates of upstream and midstream oil and gas companies have historically been intertwined.
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