As efforts by climate change protestors to take over Wall Street highlight, the worlds of energy and finance are never far apart.
But who has fared best in their efforts to produce returns from investing in energy?
There are currently 60 fund managers in the Citywire database running dedicated energy funds tapping into oil, gas and alternative resources.
Out of this pool of talent, there are 39 who have a five-year track record dating back to August 2014. The average manager in this peer group returned 25.14% in absolute terms over this five-year timeframe.
This is while the most commonly held benchmark in the sector, the FTSE AW/Oil & Gas TR, rose 59.6% in US dollar terms over the same five-year period.
Against this backdrop, there are just three managers who have outperformed in each of the past five years. This has seen them return more than their average peer in each 12-month period. So who are the standout specialists?
Will Riley, Guinness Asset Management
Five-year return (August 2009-August 2014): 62.37%
Best year of outperformance vs. average manager: +11.69% in 2010/11
The first of the trio of outperformers is Guinness Asset Management’s Will Riley. The Citywire AA-rated manager has been a lead manager on the specialist strategy since its launch in March 2008.
Riley’s colleague Tim Guinness, who has also been on the Luxembourg-domiciled since inception, misses out on inclusion due to also serving on the Guinness Alternative Energy fund during this analysis period.
Riley and Guinness, who now co-manage with Jonathan Waghorn since he joined the group in July 2013, invest primarily in integrated oil and gas companies (39.6%), and also have strong exposure to exploration and production firms (35.1%).
The largest single bet in the 44-stock fund, which has $339 million in assets, is a 3.7% allocation to Houston-based oil and gas Helix Energy Solutions Group.
Sébastian Lagarde, AXA IM
Five-year return (August 2009-August 2014): 85.54%
Best year of outperformance vs. average manager: +17.59% in 2010/11
Posting a stronger absolute performance than his fellow outperformers is AXA IM’s Sébastian Lagarde, who has run the Luxembourg-domiciled energy fund since December 2006.
He focuses primarily on small- and mid-cap companies in the $288 million fund. While 92% of the fund is invested directly in energy companies, Lagarde has a number of off-benchmark bets in the fund at present, such as materials, IT and industrials.
On a geographic basis, the bulk of the fund is exposed to the US market, which makes up 61% at present. This is ahead of allocations to Canada (28.7%) and minor investments in the UK (2.95%) and Australia (1.51%).
Doug Hohertz, The Mitchell Group
Five-year return (August 2009-August 2014): 72.9%
Best year of outperformance vs. average manager: +14.12% in 2011/12
The third outperformer from the 39-strong pool of managers boasting a five-year track record is Texas-based investor Doug Hohertz. Hohertz, who works for The Mitchell Group, has run the Heritam SICAV – Energy Fund on mandate since July 2008.
His fund has an 86% allocation to the US market, while holding minor allocations to Netherlands (3.89%), Norway (2.99%) and Canada (2.88%) according to the most recent available data. The largest positions are in independent oil and gas exploration company Newfield Exploration (5.34%).
This is not Hohertz’s first appearance in analysis into the energy and natural resources sectors. He emerged as one of the best performers on a and among the top five in natural resources over the three years to the end of October 2012.