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Blackstone Bets Big on Low Natural Gas Prices for the Long Term

first_img FacebookTwitterLinkedInEmailPrint分享Wall Street Journal:Blackstone Group LP has a deal to buy Harvest Fund Advisors LLC, an investment-management firm with more than $10 billion in assets under management that focuses on midstream energy assets.The move is part of a large Blackstone bet that it can profit on rising natural-gas production, even if gas prices remain stuck at depressed levels. The New York private-equity firm has built a roughly $7 billion bet on natural gas by investing in drilling fields, pipelines and a gas export terminal, The Wall Street Journal reported this week.Wall Street Journal:Blackstone Group BX -0.48% LP is making one of its biggest bets on the growth of natural gas production, wagering that even if gas prices remain stuck at depressed levels, it can profit.The New York private-equity firm has built a roughly $7 billion bet on natural gas by investing in drilling fields, pipelines and a gas export terminal. The latest piece came last month, when it agreed to pay $1.57 billion for a 32.4% stake in the Rover Pipeline, a 710-mile tube being built across Ohio.Natural gas investments have been popular in recent years among private-equity firms. Many investments count on prices rising to turn profits—and have been doomed by low prices.Blackstone says its wager is generally more dependent on production volumes increasing than on prices climbing. Most of the $7 billion has been put toward moving gas out of areas where drilling has increased despite low prices. The remainder has been invested in exploration and production in those regions.“We’re betting on which basins are going to be the winners,” said David Foley, who leads the firm’s energy investing. He’s put Blackstone’s money down in West Texas, Appalachia and Louisiana.Goldman Sachs Group Inc., Citigroup Inc. and others say that abundant supply, and production that can be ramped up quickly, should keep U.S. natural gas prices at an average of around $3 per million British thermal units for the next couple of years. Futures contracts for gas to be delivered in the winter, when demand and prices tend to be highest, don’t exceed $3.50 per mmBtu until late 2027, according to FactSet.Blackstone joins a crowded field of private-equity firms that have barreled into gas investments since the combination of horizontal drilling and a rock-cracking process called hydraulic fracturing unlocked new drilling fields across the country. These firms’ cash helped feed a drilling frenzy that has produced a flood of the heating and power-generation fuel.More: ($) Why Blackstone Is Betting $7 Billion on Natural Gas Blackstone Bets Big on Low Natural Gas Prices for the Long Termlast_img read more

Wider stakeholders and trust at heart of revised UK corp gov code

first_img“To make sure the UK moves with the times, the new code considers economic and social issues and will help guide the long-term success of UK businesses,” he said.The FRC is currently subject to a government-commissioned independent review following criticism of its role in the wake of the collapse of contractor Carillion.With a renewed focus on the application of the main principles and fewer provisions, the new code was “shorter and sharper”, the FRC said.Specific changes included a requirement for boards to describe how they have considered the interests of stakeholders – such as their employees, customers and suppliers – when performing their duty under section 172 of the UK’s Companies Act.Company boards should also improve engagement with their workforces through either one of or a combination of a director appointed from the workforce, a formal workforce advisory panel, or a designated non-executive director.“The UK’s corporate governance framework is based on a system of shareholder primacy, but public opinion has shifted to focus on boards’ responsibilities towards other stakeholders including their workforce, their suppliers, and the broader community in which they operate,” wrote Paul George, executive director of corporate governance and reporting at the FRC, in a blog on the updated code.The changes to the code tie in with the government’s introduction of secondary legislation requiring companies of a certain size to explain how their directors have complied with the section 172 requirements.To address public concern over executive pay, the 2018 code stated that remuneration committees should take into account workforce remuneration and related policies when setting director pay levels.“Importantly, formulaic calculations of performance-related pay should be rejected,” said the FRC.The new code also strengthened expectations for companies to report back when there was a significant vote against a board recommendation for a resolution at a general meeting.David Styles, director of corporate governance at the FRC, told IPE this was “one of the weakest areas of reporting” under the outgoing code.In an attempt to remedy this, the 2018 code stipulates that, when 20% or more of votes have been cast against a board recommendation for a resolution, companies should explain what actions they intend to take to consult shareholders to understand the reasons for this, and to provide an interim report within six months.The Investment Association (IA), the UK’s asset management trade body, has been maintaining a public register of companies that experienced a “significant” vote – defined as 20% or more – against a resolution at a general meeting.An asset manager welcomeThe IA was positive about the new code.Andrew Ninian, director of stewardship and corporate governance at the trade body, said: “We are pleased that the code sets out the importance of boards understanding the views of all stakeholders as this will help ensure that directors are making the best long term decisions by considering the impact on all their material stakeholders.”Combined with continued investor pressure, the expectations set out in the new code with respect to executive pay “should help to deliver changes in remuneration outcomes”, he added. The Financial Reporting Council (FRC) today unveiled a new corporate governance code for the UK that broadens the scope of governance to emphasise the importance of companies’ relationships with a wider range of stakeholders than just their shareholders.The FRC said the revised code “puts the relationship between companies, shareholders and stakeholders at the heart of long-term sustainable growth in the UK economy”.“It calls for companies to establish a corporate culture that is aligned with the company purpose, business strategy, promotes integrity and values diversity,” added the audit regulator.FRC chairman Sir Win Bischoff said the new code had an “overarching theme of trust” and was “paramount in promoting transparency and integrity in business for society as a whole”. Saker Nusseibeh, CEO, HermesSaker Nusseibeh, chief executive of Hermes Investment Management, also welcomed the revised code, highlighting that it “emphasises the need for the alignment between companies, shareholders and stakeholders as a means to generating greater long-term, sustainable value”.“The code places an obligation on boards to articulate the company’s purpose beyond its balance sheet, which encourages companies to place greater weight on their relationships with all stakeholders,” he added.“Moreover, the renewed focus on the application of the principles and the FRC’s wish to see clear and meaningful reporting is a welcome addition.”The FRC said that investors and their advisors should avoid tick-box and “mechanistic” evaluations of companies’ explanations.last_img read more