Alma Recurrent Energy Infrastructure Income Fund
Overview
Alma Recurrent Energy Infrastructure Fund invests mainly in publicly traded equity securities of energy companies, with a focus on “midstream” energy infrastructure companies.
The fund’s management is delegated to Recurrent Investment Advisors.
Share Class
NAV
Cumulative Performance (%)
Fund Inception 11 May 2023
| Daily | Monthly | Ytd | 1Yr | 3Yr | 5Yr | Incept. | Incept.Date |
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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
Fund Strategy
The Strategy seeks total return with substantial current income from a diversified portfolio of infrastructure and energy companies specializing in transportation of oil and gas (“midstream”) and engaged in the treatment, gathering, compression, processing, transportation, transmission, fractionation, distribution, storage and terminalling of natural gas, natural gas liquids, crude oil, refined products or coal. The investment process is strongly focused on company-level valuation analysis by using detailed financial models of the companies.
Energy infrastructure assets often generate revenues with inflation and interest rate pass-throughs, making investments in these companies potentially better insulated from inflation risks over time. Further, energy infrastructure assets have long lives and low variable costs, meaning they can generate high levels of free cash flow across the full economic cycle.
Investment Manager
Recurrent Investment Advisors is an energy specialist investment firm founded in 2017 and based in Houston, Texas. The firm is registered as an investment adviser with the U.S. Securities and Exchange Commission (SEC) and is primarily owned by its co-founders Mark Laskin and Bradley Olsen, who both have extensive experience in energy investing. Recurrent Investment Advisors focus on public investments in natural resources and energy infrastructure.
Key Persons
Mark Laskin
Co-founder and Portfolio Manager
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 2013 to 2016, 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 Portfolio Manager
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.
Investment Manager's Commentary
as of 30/08/2024Market Review and Outlook
Inflation is off the list of investor concerns as softening employment has the market’s attention. “There is no chance whatsoever that excess demand would rekindle double-digit inflation in the United States,” writes an influential Fed economist. But this quote isn’t from 2024 – it’s from 1975. With CPI and economic growth moderating, the Fed (then and now) finds itself under great pressure to cut rates. In the 1970s, looser monetary policies (and a lack of commodity capex) re-ignited inflation to new highs within 3-4 years and drove sustained outperformance for commodity-levered equities. Here in 2024, commodity capex is in decline and inflation is out of the headlines. If history is a guide, rate cuts after an inflationary shock may offer a compelling entry point for investors in commodity-levered equities.
As economic growth stalls, inflation is forgotten as markets demand rate cuts
With an inflationary shock 2 years behind us, market indicators and influential economists alike are demanding looser monetary conditions. It may seem surprising how quickly
“economic slowdown” has replaced “inflation” as the primary concern for investors. But if we examine the most dramatic inflationary period in modern history – the 1970s – perhaps we shouldn’t be so surprised.
In the face of moderating CPI and economic growth, the mid-1970s – which we now know to be only a brief respite between two periods of historically severe inflation – were instead marked by a lack of concern around inflationary pressures in the economy and vocal demands for looser monetary conditions in the face of the overriding fear for any democratic economy: slowing economic growth.
While we cannot yet know if the late 2020s will experience a period of re-ignited inflation like the late 1970s, we do know that the current economic discourse appears to echo the mid1970s, as inflationary concerns have quickly subsided in the face of weakening economic growth (even with actual growth and unemployment metrics remaining mild by any historical standard).
Today’s inflation is supposedly less dangerous than the 1970s – but many experts weren’t worried in the mid-70s either
In 1975, Fed Economist Andrew Brimmer wrote in the New York Times of the Fed’s inflationary focus, “the Fed’s perception is mistaken and ought to be revised… there is no chance
whatsoever that excess demand would rekindle double‐digit inflation in the United States.”
The sentiment is echoed in many current expert opinions, which seem to be overwhelmingly in agreement that it is high time, or even past high time, to cut rates. Echoing Andrew
Brimmer in 1975, famed economist Claudia Sahm said on CNBC, “The Federal Reserve “absolutely” needs to deliver a 50 basis point interest rate cut next week.”
Today, in September 2024, the market has firmly moved away from inflation-oriented considerations. Consensus is that a slowing economy will drive rates lower and the key risk is fromweak demand, not underinvestment. Perhaps it’s a timely reminder that 2 years before the highest CPI reading in US history (and a sustained period of commodity-levered equity
outperformance), expectations of falling rates and insufficient demand were also mainstream.
Fund
Performance Review
During the month of August 2024, the Alma Recurrent Energy Infrastructure Fund returned 2.94%. On a year-to-date basis the Fund has risen 22.43%.
Facts & Documents
Facts
Fund Domicile: Luxembourg
Fund Type: UCITS SICAV
Fund Launch: 11 May 2023
Base Currency: USD
Depositary, Administrator, Transfert Agent: BNP Paribas SA
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 Advisors
Fund Managers: Mark Laskin & Bradley Olsen
Countries where the fund is registered:
Luxembourg, Austria, Germany, France, UK, Italy, Switzerland, Ireland
Identifiers:
Founder EUR Hedged Capitalisation share class
ISIN: LU2568324458
Ticker: ALMRECK LX
Launch: 11 May 2023
Institutional USD Capitalisation share class
ISIN: LU2568321942
Ticker: ALMAYUI LX
Launch: 11 May 2023
Documents
Subscribe to the Fund Monthly Newsletteravailable upon request