Thomas McCaffrey Quoted in American Banker on Private Equity and Slumping Oil Prices
American Banker has quoted Akin Gump oil and gas partner Thomas McCaffrey in its article “Energy Slump Makes Strange Bedfellows of Banks, PE,” which looks at the impact of declining oil prices on private equity. Crude prices, as the article notes, have fallen sharply over the past year, yet private equity firms remain interested in cutting deals.
McCaffrey said the interest in oil among PE investors is nothing new. Funds have been active in energy markets for more than a decade and when prices “are going up and everyone is fat and happy, most people aren’t looking at who the buyer is.”
Still, McCaffrey added, the dip in prices has led to new opportunities for dealmaking with an “uptick” in deals over the past few months. Many energy companies, he said, have responded to the drop in prices by cutting costs and laying off workers, but those in dire need of cash have sought out private equity investments or have sold land, mineral rights and other assets they cannot afford to develop.