Despite the relative health of MLPs during this market-crushing downcycle, several notable partnerships in distress could be primed for private-equity takeovers in the near future, an oil and gas investing executive believes.
Some groups that remain confident in the long-term fortunes of the oil and gas space may be painting targets on certain MLPs.
“I think you’re going to see a lot of these publicly traded partnerships be taken private by private equity funds,” Michael Underhill, founder and chief investment officer of Wisconsin-based Capital Innovations LLC, told HartEnergy.com. “They look at a publicly traded MLP. It’s got asset valuation, full transparency, audit and financials—all the things that you want. You have to go out and spend money on it, but the company’s already publicly traded so they already spent all the money on corporate governance and everything else.”