Alma Recurrent Global Natural Resources Fund

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Overview

  • Alma Recurrent Global Natural Resources Fund invests primarily in publicly traded equity and debt securities of global natural resource-related companies, operating in a capacity related to the supply, production, distribution, refining, transportation and consumption of natural resources.
  • The fund’s management is delegated to Recurrent Investment Advisors LLC.

Share Class

NAV

Cumulative Performance (%)

Fund Inception 29 June 2018

Daily Monthly Ytd 1Yr 3Yr 5Yr Incept. Incept.Date

The performance data shown represents past performance. Past performance is not a guarantee of future results. Current performance may be lower or higher than the performance quoted. The investment return and the principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.


Strategy & Manager

Funds Strategy

The fund invests primarily in publicly traded equity and debt securities of global natural resource-related companies, operating in a capacity related to the supply, production, distribution, refining, transportation and consumption of natural resources.


Investment Manager

Recurrent Investment Advisors LLC is an SEC regulated entity located in Texas and created in 2017. Cofounders Mark Laskin and Brad Olsen both benefit from a significant track record in similar strategies.

Key Persons

Mark Laskin, Co-founder and Managing Director

Before founding Recurrent Investment Advisors, Mark was the lead energy portfolio manager and Chief Investment Officer at BP Capital Fund Advisors (BPCFA), an energy-focused long-only investment management firm.

Under Mark’s leadership, BPCFA grew from $50mm to nearly $400mm in assets under management in less than 3 years. BPCFA’s energy strategy was the #1 performing energy open-end mutual fund, as ranked by Morningstar, from 12/31/13 to 12/31/16, and its MLP strategy was in the top decile in its Morningstar category over that same time period.

Mark has 13 years of additional portfolio manager experience at Van Kampen, Morgan Stanley and Invesco. As part of a diversified large cap value strategy, Mark managed more than $10 billion and has managed energy portfolios for more than 12 years. While at Morgan Stanley Investment Management, Mark served as the internal head of equity investment research.

Mark earned an MBA/MA in Finance from the Wharton School of Business at the University of Pennsylvania and a BA in History from Swarthmore College

 

Brad Olsen, Co-founder and Managing Director

Before founding Recurrent Investment Advisors LLC, Brad was the lead MLP portfolio manager for BP Capital Fund Advisors (BPCFA). Under Brad’s leadership, MLP AUM more than doubled (excluding the impact of appreciation).

From 2011 to 2015, Brad led Midstream Research for Tudor, Pickering, Holt & Co. (TPH & Co.), where he was recognized as the top all-around stock picker in the US by the Financial Times in 2013, and the top energy stock picker in the US by Starmine in 2014.

Brad also has experience as an investment analyst at Eagle Global Advisors in Houston, where he was part of a 3-person team that grew midstream/MLP AUM from $300mm to over $1bn from 2008 through 2011. He has also worked in investment roles at Millennium International and Strome Investment Management. He began his career in the UBS Investment Banking Global Energy Group in Houston.

Brad earned a BA in Philosophy, Political Science, and Slavic Studies from Rice University in Houston.


Statistics & Commentary

Performance

The performance data shown represents past performance. Past performance is not a guarantee of future results. Current performance may be lower or higher than the performance data quoted. The investment return and the principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost.

Sector Breakdown as a % of AUM

as of 31/12/2018

Geographical exposure as a % of AUM

as of 31/12/2018

Portfolio Characteristics

as of 31/12/2018
Main indicators Fund Index
No. of securities 40 90
Estimated Price/Earnings 13.8x 11.7x
Estimated Long Term Growth 9.8x 10.6x
Price to Book Ratio 1.6x 1.3x
Price to Sales Ratio 1.6x 0.8x
Weighted Market Cap ($bn) 43.9 61.8
Median Market Cap ($bn) 14.7 16.0
Active Share (%) 56.9 -

Top 10 Position Details

as of 31/12/2018
Security name Sector % AUM
Fortescue Metals Group Ltd Metals & Mining 4.15
Glencore PLC Metals & Mining 3.84
Total SA-Spon ADR Oil, Gas & Consumable Fuels 3.80
Nutrien Ltd Chemicals 3.79
Energy Transfer Lp Oil, Gas & Consumable Fuels 3.72
Barrick Gold Corp Metals & Mining 3.65
Vale Sa-Sp Adr Metals & Mining 3.42
Exxon Mobil Corp Oil, Gas & Consumable Fuels 3.39
BHP Group LTD-SPON Adr Papaer & Forest Products 3.23
UPM-Kymmene OYJ Paper & Forest Products 3.13

Investment Manager's Commentary

as of 31/12/2018

Market Review and Outlook

Natural Resources Discussion – clear parallels between today’s market and the “V-shaped” market of late 2015-early 2016

As 2018 came to a close, weakness in natural resources sectors mirrored the weakness in broader markets. While the brief yet powerful downturn was noteworthy, as we analyze the market, we look for recurring cycles to help answer the question of how the markets are likely to evolve.

In this case, as we specifically think about energy and natural resources markets, the most relevant time period for analysis is 2H 2015/1Q 2016. While it is a fairly recent example and therefore likely to be considered by the market, idiosyncratic dynamics in the oil market make not only the price changes, but the timing, relevant.

Important to the discussion is the concept of the dispatch curve framework for the global oil market, which we outlined in our white paper “The Changing Shape of Energy Markets” (linked above). The relevant issues in the market today are two factors:
1.the lead time for oil production, particularly onshore in the US, is getting shorter, meaning that changes in global demand (and prices) can lead to an increase or
decrease in US production, with only a few month lag, and
2. oil prices determine whether new production will “turn on” or “turn off”.

The combination of these two factors mean that, more than ever before, at any given time, the oil price is a function of the real time global supply and demand. Higher oil demand will cause oil prices to rise, which will incentivize more oil to be produced, most specifically in US Shale.

In the case of the last few months, the inverse is also true. The calendar 4th quarter is known as the “shoulder months” because global oil demand is significantly lower than in the “peak driving season” of the summer months. With high prices in the summer incentivizing US producers to grow production by 1 million barrels per day from May to October, seasonally lower 4th quarter demand caused oil prices to fall.

Interestingly, a very similar dynamic occurred late in 2015. With lower seasonal demand in 4Q 2015, the oil price fell by 43% after Labor Day. As the oil price fell below $30/barrel – a price too low to incentivize new oil production – the steep decline rates of already-producing wells caused US oil production to fall by 700,000 barrels per day from January to October 2016, thereby helping to balance the global oil market. The dynamic of seasonally weak demand, and the surge of production from wells drilled the previous summer, are largely similar to the fundamental dynamics observed in 2015-16.

So while oil prices fell dramatically in 4Q 2015, and now 4Q 2018, the more relevant conversation for this communication is “what happened to the stocks?”

The combination of two factors helped energy markets to improve early in 2016. Firstly, as seen in the chart below, oil production peaked and started to fall in response to lower oil prices. Then, as summer neared, seasonal demand increased and the global oil market returned to better balance, and oil prices rose dramatically from the $26/barrel price reached in February.

Energy stocks, as measured by the S&P 500 Energy Index, reached their bottom on January 20, 2016, and closed 2016 nearly 43% higher than the January 2016 low.

In summary, today there appear to be many similarities to the energy markets 4Q 2015/1Q 2016. The low demand shoulder months caused oil prices and energy stocks to sharply fall, followed by a multi-quarter recovery. The combination of an improving oil commod


Facts & Documents

Facts

Fund Domicile: Luxembourg

Management Fee: 0.95% p.a. for I shares

Fund Type: UCITS SICAV

Fund Launch: 29 June 2018

Base Currency: USD

Depositary, Administrator, Transfert Agent: BNP Paribas Securities Services (LU)

Dealing: Each day with a 1-day notice

Cut-off time: 12 pm CET

Management Company: Alma Capital Investment Management (LU)

Investment Manager: Recurrent Investment Management (LU)

Fund Managers: Mark Laskin & Bradley Olsen

Countries where the fund is registered:
Luxembourg, France

Identifiers:

Institutional USD Capitalisation share class
ISIN: LU1823602369   Ticker: ARGNIUC LX    Launch: 29 Jun 2018

Institutional EUR Capitalisation share class
ISIN: LU1845388146   Ticker: ARGNIEC LX    Launch: 29 Jun 2018

Documents

SICAV ALMA CAPITAL INVESTMENT FUNDS
  1. ACIF Prospectus
KIIDS Other sub-funds and other languages
available upon request