Carlson Capital Eyes Three Energy Hedge Funds LaunchA Dallas, Texas-based multi-strategy, alternative asset management firm Carlson Capital, L.P., announced its plans for the launch of three hedge funds to invest in the debt and equity of energy companies after oil prices slumped to their lowest in five years.
“This is not an attempt to call the bottom in the price of crude -- in the short term the price can clearly head lower,” founder Clint Carlson wrote in a Dec. 15 letter to clients. “Regardless of the short-term direction of the commodity, there will be dislocations that can be profitably exploited.”
Oil has slumped about 45 percent this year to trade below $55 a barrel amid slowing growth in world demand, rising production in North America and as the Organization of Petroleum Exporting Countries resists calls to reduce output. High-yield bonds of energy companies have tumbled 18 percent since oil prices peaked amid concern that a sustained slump will trigger a rise in defaults.
Carlson, based in Dallas, said price swings and uncertainty in oil markets present opportunities to make long-term investments in energy “at distressed valuations well below those seen at the depths of the financial crisis.”
One of the funds that Carlson plans to start, Black Diamond Energy Sector, will seek to outperform an exchange-traded fund, SPDR S&P Oil & Gas (XOP) Exploration & Production, and will charge a management fee and an incentive fee on the amount that it beats the energy benchmark, according to the letter.Source: Bloomberg