Bloomberg News

Private-Equity Executives Seeing S&P Decline Favor Energy

June 10, 2014

One-third of private-equity dealmakers say oil and gas present the best investment opportunity for the next 12 months and a majority say the Standard & Poor’s 500 Index will decline in the next six months, according to a survey.

The survey, conducted by the Private Equity Growth Capital Council, showed 34 percent of buyout executives favoring energy over investment areas such as health care, consumer goods and financial companies. Of the 119 investors, 52 percent said the S&P 500 index of large U.S. companies will fall below 1,900 in six months. The benchmark closed yesterday at 1,951.27.

Private-equity firms such as Apollo Global Management LLC (APO:US) and Blackstone Group LP are investing in energy to take advantage of the decade-long shale revolution that is unlocking oil and gas supply in North America. New York-based Apollo committed as much as $400 million to Halcon Resources Corp., the oil and gas exploration and production company said yesterday, and Oaktree Capital Group LLC (OAK:US) said it’s acquiring Highstar Capital to increase investments in energy projects and infrastructure.

The executives surveyed were less bullish on the broader U.S. economy, with 42 percent saying heightened regulations have hampered the recovery since the 2008 financial crisis, according to Washington-based PEGCC, which represents more than 30 firms. A majority of investors said it will take more than three years for unemployment to return to about 5 percent from 6.3 percent as of May.

The online survey was conducted from May 20 through June 5.

To contact the reporter on this story: Devin Banerjee in New York at dbanerjee2@bloomberg.net

To contact the editors responsible for this story: Christian Baumgaertel at cbaumgaertel@bloomberg.net Josh Friedman, Sree Vidya Bhaktavatsalam


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Companies Mentioned

  • APO
    (Apollo Global Management LLC)
    • $27.63 USD
    • 0.08
    • 0.29%
  • OAK
    (Oaktree Capital Group LLC)
    • $50.45 USD
    • 1.09
    • 2.16%
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