download pdf - Fund Evaluation Group, LLC
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NATURAL RESOURCES<br />
Oil and natural gas prices remained stable through year-end, despite concerns<br />
about the fiscal cliff. The fundamental supply/demand outlook for oil remained<br />
strong, contributing to demand for assets held by private energy<br />
funds.<br />
Crude oil prices declined slightly during the fourth quarter to close at $91.82,<br />
down from $92.20 at the end of the third quarter. 1 Following a 17% increase<br />
during the third quarter, natural gas prices experienced a marginal increase in<br />
the fourth quarter, closing at $3.35/mmbtu, compared to $3.32/mmbtu at the<br />
end of the third quarter. 2 Evidence of slowing production was the key factor<br />
contributing to stable natural gas prices after they reached a multi-year low<br />
earlier in the year. Additionally, the percentage of electricity generated from<br />
natural gas continues to grow, as power generation plants switch from coal to<br />
natural gas.<br />
Crude Oil and Natural Gas Prices<br />
$160<br />
$140<br />
$120<br />
$100<br />
$80<br />
$60<br />
Crude Oil Crude Oil and Natural Gas Prices<br />
$40<br />
$20<br />
$0<br />
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012<br />
Source: Source: Energy Energy Information Information Agency Agency<br />
Private Energy <strong>Fund</strong>s<br />
Crude Oil Natural Gas<br />
Private energy funds saw record inflows of new capital in 2012, driven by<br />
strong returns on recent funds and increased demand from institutional investors<br />
for real assets strategies with inflation protection characteristics. Through<br />
the third quarter, U.S. private equity firms raised approximately $11.5 billion<br />
for energy-focused funds; additional funds raised significant capital late in the<br />
year. During 2012, Blackstone <strong>Group</strong> announced that it had closed its first<br />
dedicated energy fund, with $2.5 billion in commitments. <strong>Fund</strong>s offered by<br />
larger, established energy groups have been oversubscribed, including EnCap<br />
Page 17<br />
$91.82<br />
$15<br />
$3.35<br />
$20<br />
$10<br />
$5<br />
$0<br />
Natural Gas<br />
FOURTH QUARTER 2012<br />
Christian S. Busken<br />
Senior Vice President /<br />
Director of Real Assets<br />
“Private energy funds<br />
saw record inflows of<br />
new capital in 2012,<br />
driven by strong returns<br />
on recent funds and<br />
increased demand from<br />
institutional investors for<br />
real assets strategies<br />
with inflation protection<br />
characteristics.”<br />
© 2013 <strong>Fund</strong> <strong>Evaluation</strong> <strong>Group</strong>, <strong>LLC</strong>
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