FundFire Alts Feature: CIO Robert Borden Comments on Energy Sector

In a recent FundFire article, Delegate CIO Bob Borden discusses the recent booming interest in energy sector investing. As fund managers stockpile cash, they are not only chasing distressed assets and other bargains, they’re using energy specialists to explore, develop and distribute commodities, finance deals and loans, and take on infrastructure projects.
In the past several years, uninvested energy sector capital levels have remained steady at over $125 billion. Because of this large accumulation of capital, fund managers have an increased interest in partnerships, joint ventures, and platforms that take advantage of specialists in the energy industry. But these partnerships go beyond assets that have already been built. “Specialization in the sector requires more resources and a broader commodities experience,” Borden says.
The oil price collapse has refocused attention on the sector. “It’s not just the commodities sell-off,” Borden adds. “But you do see a lot of distressed players and a tremendous amount of distressed capital raised, and a lot of it is sitting around with not a lot of places to go. The cycle has a long way to play out.”

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