Alma Recurrent Global Natural Resources Fund
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.
Cumulative Performance (%)
Fund Inception 29 June 2018
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
Investment objective: the fund seeks total return by investing in global natural resource-related companies.
- Typical industries in which the fund invests: energy, basic materials, infrastructure, transportation and logistics
- The fund may invest in companies of any market size capitalization, including IPOs
- The investment process incorporates macroeconomic and commodity supply/demand factors with fundamental company analysis
Recurrent Investment Advisors is focused on understanding and profiting from commodity cycles to make differentiated natural resource investments
- Formed in April 2017. Registered as an investment adviser with the U.S. Securities and Exchange Commission (SEC)
- Primarily owned by its co-founders Mark Laskin and Bradley Olsen, who both have extensive experience in energy investing
- Based in Houston, Texas (US)
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
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 a % of AUM
Geographical exposure as a % of AUM
as a % of AUM
Top 10 Position Details
Investment Manager's Commentaryas of 28/08/2020
Market Review and Outlook
Global natural resources markets outpaced broader markets as improving economic prospects and increased inflation expectations supported the sector. The Alma Global Natural Resources Fund rose 0.31%, performing in line with the S&P Global Natural Resources Index’s 0.35% return. During the month, portfolio holdings Viper Energy, Renewable Energy Group and Plug Power rose by 18.2%, 26.5%, and 86.3% respectively. Aluminum and steel holdings fell, pausing after an extended period of outperformance.
With commodities and basic materials representing a much smaller share of GDP and inflation indices today than in the 1970s, we believe that the impacts of commodity rallies are less likely to show up in measures of consumer inflation today; accordingly, policymakers are more likely to permit significant commodity price inflation as the impacts on CPI is likely to remain muted.
With significant global fiscal stimulus and the prospect of global economic improvement as COVID impact lessen, many investors look to historical periods as a guide. It has been many years since meaningful inflation in developed markets, with US CPI increases briefly exceeding 3% most recently in 2008, when YoY CPI growth reached a peak of 5% for a short period of time. More notably, in the 1970s CPI exceeded 10% YoY growth in 2 periods; from 1974-1975, and for a longer and even more intense period from 1979-1981.
The question many investors ask: Can 1970s style inflation happen again?
The short answer, as we discuss below, is no. But this is, counterintuitively, positive for hard assets and commodities, not negative. Services are a much larger part of today’s global economy than in the 1970s. In the 1970s, “hard assets”, in the form of commodities and industrial goods, comprised approximately 60% of US CPI and 25% of US GDP. As services became a larger part of the US economy, those percentages have fallen to 38% and 13% respectively, as seen in the chart below (please see factsheet below). Similarly, by the mid 1990s, “hard assets” comprised 42% of global GDP, falling to 26% by 2018.
Today, commodity-sensitive hard assets are a much smaller part of GDP, and accordingly, a smaller weighting in the “baskets” that central banks use when calculating inflation. With commodities and industrial goods as a much smaller portion of GDP and CPI than in the 1970s, price increases in commodities and hard assets are likely to be tolerated by monetary policy makers for much longer than in the 1970s, when the impact of rising commodity prices triggered meaningful increases in inflation that were felt by consumers almost immediately.
As a result, the ability of “hard assets” to cause inflationary pressures is muted, particularly in broad based economic data such as CPI, which as of 2019 is 62.5% determined by services industries.
In the first chart, we noted that YoY changes in commodity prices have ranged from -40%-+40% since the late 1970s. To highlight the reduced influence of hard assets in CPI, we can look to another economic data set – the Industry Commodity portion of the Producer Price Index (PPI). As a closer approximation of the impact of hard assets on producers’ input costs, we can see that that index’s volatility remains, while CPI volatility has been reduced in comparison. (please see factsheet below)
As we monitor real-time economic indicators which identify asset inflation critical for natural resources investments, changes in commodity prices show a much stronger relationship to the PPI – Industrial Commodities Index rather than the CPI, as shown below (please see the factsheet below).
As the US economy has evolved to a nearly 2/3 services focus, the CPI has grown to be less valuable as an indicator of asset inflation. While many investors continue to look to CPI for signs of economic inflation, our analysis shows that compared to the past, higher levels of asset inflation would be required to have a meaningful impact on economic inflation as measured by CPI. In an attempt to analyze monthly asset inflation data critical for natural resources investing, our focus has migrated from CPI data to secondary indicators like the PPI Industrial Commodities Index, which recent data shows to have already returned to 2019 levels.
Facts & Documents
Fund Domicile: Luxembourg
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:
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
available upon request