Strength Fund Loses Billions As Oil And Gas Well Funding Is Going Sour

The scale of the loss is highly unusual for a private equity firm of EnerVest’s size.
EnerVest’s $2 billion energy fund that borrowed heavily to buy up oil and gas wells when crude prices were soaring has essentially gone bust, the Wall Street Journal reported.
Still, the Wall Street Journal notes that EnerVest’s competitors also turned to borrowing to amplify returns from their investments in oil and gas wells.
Houston-based private equity firm EnerVest has posted a spectacular loss in one of its energy funds, a troubling sign that other firms could yet face a reckoning after a three-year oil price downturn.
Private equity firms are typically able to keep their money in investments for several years, allowing them to ride out storms like the prolonged oil price downturn.

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