In the last decade, the United States saw a tremendous shale-drilling boom in which private equity firms were among the most aggressive financiers. Seeing great potential returns due to increasing production, many investors financed the shale boom, but did so with the price of $100 per barrel of oil in mind. In the long run, the shale boom produced market-flooding supplies of oil and gas and was a factor in oil prices crashing to $45 a barrel in 2014.
BIG DATA AND VC
As the world becomes more interconnected through advances in technology, the creation of new data is growing at 60 percent a year. This growth is driven by a dramatic increase in transactions and a flurry of new devices which create additional sources of data. This explosion of data makes the storage of the world’s data, and the ability to analyze it more and more difficult. Companies are looking for solutions to match the volume of data they collect on all aspects of their business, and they also need new tools to improve the speed at which they can process and analyze streams of data.
CAESARS ENTERTAINMENT: APOLLO’S GAMBLE
This past month, an agreement was finally reached between Apollo & TPG Capital—the two private equity firms that controlled a majority stake in Caesars Entertainment—and its largest creditors. This deal marked the end of what has been an extremely contentious and often ugly series of lawsuits and failed negotiations in a bizarre tale of a Wall Street players going head-to-head. The clear winners of the new agreement are second-lien bondholders including David Tepper’s Appaloosa Management and Oaktree Management, amongst others, which held just under $900 billion in bonds at one point.
APOLLO MANAGEMENT ACQUIRES OUTERWALL
NUTANIX: BREAKING THE TREND OF IPO FAILURE
Just two years ago, 117 venture-backed companies had IPOs totaling $15 billion in offer amount. However, in the first two quarters of 2016, there have been just 18 IPOs totaling less than $1.5 billion. This trend is largely a symptom of CEOs’ eagerness to remain private as long as possible as a means of focusing on long term growth without short term scrutiny. Unfortunately for venture funds, when companies with large valuations avoid IPOs, exits via M&A become more difficult and it is harder to return capital to investors.