Tuesday , February 18 2020
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Private equity and the mark-to-market myth

Summary:
News overnight from the Wall Street Journal: Southland Royalty, a private equity owned oil-and-gas company with assets in Wyoming, has filed for bankruptcy.Formed in 2015, Southland had received around .1bn in equity commitments from its private-equity owner, Encap, and other investors including Southland’s management. A further 0m in debt was provided by a revolving line of credit, according to the WSJ.Another bankruptcy in the US’s struggling energy sector isn’t that surprising. But this is:EnCap wrote down the value of its investment in Southland by 25 per cent in early 2019, according to the first person. The October investor report showed that the firm valued its investment in the company at 3.7 million at the end of September, nearly the same amount as the 5.5 million it

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