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“Most of the established LPs (limited partners) will stick with it. They may not increase their allocation to energy, but they won’t slack off either,” said Jeff Eaton, principal of Eaton Partners.
“Track records of these funds and effective monetizations will matter to them, and some funds trying to raise new money by year-end may not close. And there may be some slippage as far as general partners launching new fund-raising efforts,” he said.
“As people build a core position in upstream they are more likely to move into more nuanced investments in midstream, and we are seeing more interest in downstream now. It’s gotten pretty competitive as they try to enhance returns, but LPs are as discerning as ever,” Eaton said.
“We’ve seen a lot of pent-up demand in Europe, and quite frankly frustration. They know the U.S. represents a lot of value, but it is difficult for institutional investors in Europe to invest in the States due to U.S. tax laws.”
In addition, sophisticated institutional investors are asking the right questions about opportunities in Mexico, wondering if the risk-reward is worth it, since it is so early in the Mexican energy reform process, he said.Back to News