Investec Asset Management has announced the arrival of energy investment specialists Charles Whall and Tom Nelson, who start this week following the departure of Jonathan Waghorn and Mark Lacey earlier in the year.
As revealed by Wealth Manager earlier this year, Whall and Nelson, who join the firm’s 10-strong commodities and resources team, have 38 years’ combined experience in the investment and energy industry.
Whall joins from Newton Investment Management, where he was most recently their lead oil and gas sector analyst, heading research.
Nelson joins from , where he has spent the last eight years, most recently as co-portfolio manager of the Guinness Global Energy fund.
Domenico Ferrini, co-chief investment officer, said: ‘Both Tom and Charles are closely aligned with our approach to investing in energy equities.
‘Consistent with the rest our team, they are bottom-up analysts who base their opinions on deep knowledge of fundamentals, and both believe in the importance of a thorough understanding of the underlying commodity price on an energy stock’s performance.’
Bradley George, head of the commodities and resources team, took on the management of the funds following the departure of Waghorn and Lacey in April.
George said he made a few changes to the Global Energy fund once he took it on, positioning it more defensively in April and May, based on the view the price of crude would fall. He then added oil services as well as oil exploration and production companies more recently.
‘We have confidence that energy equities will continue to re-rate upwards given that the oil price remains at elevated levels,’ said George.
The manager said he forecasts the price of oil over the long-term at $100 a barrel, and with this in mind, he believes energy equities have 40%-60% upside over the next 12 months.
He added, on the price of oil: ‘We don’t think these price levels are valued in energy equities, which have outperformed over the last six-eight weeks.’
George explained his bullish views on oil come from tight supply demand fundamentals, with strong demand in Asia and the emerging markets, but a lack of a large supply response. At the same time, the cost of extraction is rising, as is the cost of labour, both of which are supportive for the oil price.
‘Also, news from the US Fed, citing QE3 for an indefinite period of time – linking QE to unemployment – is supportive for hard assets, especially commodities, and those with not much supply,’ added George.
Over three years, the Investec Global Energy fund has delivered 8.82%, versus the FTSE AW/Oil and Gas Total Return index’s 27.74%.