Even before the shocking oil price plunge threw the industry into a tailspin, pri­vate-equity firms and their portfolio teams were displaying more caution and enhanced discipline. That will continue. Rig counts were already coming down, exits were delayed if nonexistent, partner incentives had been adjusted and how companies deploy capital was changing.

The new reality is that the flow of private equity to new teams has slowed down, and instead pro­viders now favor giving additional capital to the teams that are already up and running—but only if they are “knocking the cover off the ball,” in the words of one private-equity provider.

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