Private Equity Funds Enter Oil Patch As Regulations Usher In Opportunity

Often regulation is viewed reflexively within the hedge fund community as a negative, the complexity and obfuscation contained 2,300 pages of Dodd-Frank being the target of a significant amount of vitriol. But the regulation may be creating opportunity for fund managers, particularly in the oil patch. Michael S. Minces, co-founder of Blue River Partners, observes the most attractive place for private equity fund managers to congregate is in the U.S. oil patch. This is where traditional bank lending on overly speculative or highly leveraged situations has been curtailed due to Dodd-Frank regulation. This opens the door for less regulated entities to originate creative loan structures and participate in markets where banks are no longer allowed.