PEX, which had $10.1 million in assets under management at the end of the third quarter, does not feature exposure to those stocks. PSP and PEX have trailing 12-month trailing yields of 10.5% and 11.3%, respectively. [Unique Sources of ETF Yield]
Losses for private equity-backed energy companies have been severe. For example, Laredo Petroleum (NYSE: LPI), EP Energy (NYSE: EPE) and Kosmos (NYSE: KOS) have plunged an average of 39% over the past 90 days, nearly triple the loss for the Energy Select Sector SPDR (NYSEArca: XLE) over the same period. Each of those companies features a private equity firm as its largest shareholder, according to Bloomberg.
Private equity firms that hold high-yield corporate bonds could feel an added pinch. Ongoing weakness in oil prices could create added stress for already cash-strapped high-yield E&P issuers. With oil prices tumbling, production costs at various shale formations high and the ability of some shale operators to generate cash challenged, some money managers are forecasting a raft of junk defaults in the energy sector. [Warnings for Junk Bonds With Big Energy Exposure]
PowerShares Global Listed Private Equity Portfolio