Oil and Gas Private Capital: Family Funded

As traditional public and private sources of capital step back, family offices are stepping in to fund selective oil and gas deals. The question is, what attracts them and can they fill the gap?

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[Editor's note: A version of this story appears in the November 2021 issue of Oil and Gas Investor magazine.]

“Anecdotally, yes, it seems like investment in oil and gas from family offices has increased on a percentage basis,” said Marc J. Sharpe, chairman and founder of the Family Office Association. “While it’s difficult to say if the trend is accelerating, it certainly feels like an institutional pullback in oil and gas investing, both debt and equity, is creating opportunity for family offices to fill the vacuum in funding.”

However, the specific motivations have more to do with internal governance and investment mandates, Sharpe noted.

“Younger generations often want to offset petroleum investments or diversify away from the sector, but deep family expertise in oil and gas, as well as a predictable and reliable return profile, maintain the asset classes overall appeal. To bridge some of these generational divides, there is an increasing interest in technology companies that seek to improve efficiency and reduce the carbon footprint.”

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