LEXPERT MAGAZINE
|
MARCH 2019 17
ey are still coming but not at the same
rate, according to Mercury. Still, he says,
PE funds have been doing "a healthy level"
of deals across Canada.
As to where the money is going, he says
it depends very much on the sector. But in
the oil patch, it's not going into producers
and explorers. Not right now.
Instead most Private Equity capital
is going into mid-stream assets that are
yield-oriented.
With so many planned new pipelines
either cancelled or held up by litigation,
regulatory processes, or pushback from
Aboriginal and environmental groups,
Private Equity money is waiting to see
whether Canada can get its landlocked oil
and gas to a coast in meaningful amounts
for export overseas.
"It's a headline issue in the energy world
from hour to hour," says Mercury. "ere
are a lot of people with cheque books who
are looking for some direction on that.
Investor confidence has been damaged in
the Canadian energy space because of
the fact we can't give clear signals to any-
body on the ability to execute on transac-
PRIVATE EQUIT Y FEATURES
Sandra Rubin is a Toronto writer
and strategic consultant.
tions here. So that's impacting our clients
around the world."
Mercury says while there is hesitation,
there's still US interest. "I've seen a lot of
term sheets so I think we have to be mea-
sured in how we view this. I hear about
US$150 billion has been raised by energy
funds in the last little while and it needs to
be spent on energy investments."
As large international energy companies
are pulling out of Canadian projects, he
says, it's oen PE firms buying their assets
— Canadian and American. He's working
in two such deals right now.
e bottom line, he says, is there is a lot
of pent-up dry powder that needs to be
spent over the next year or two.
"ere is huge pressure on the provid-
ers of capital to deploy that capital into the
right opportunities. Don't underestimate
that. So notwithstanding our current chal-
lenges, particularly in energy, there's a lot of
PE money ready to look at doing deals in
Canada quickly. ey've done it before and
made money."
