Overview

Oil Macro:

Oil is cyclical and intrinsically volatile because supply and demand are inelastic to price in both the short and medium term.

The current cycle has been the most violent in history.  We think the extreme decline will lead to an extreme ascent.

On the way down, the cycle was exaggerated by OPEC’s changed behavior:

  1. The cartel gave up managing the market for the first time since 1986.
  2. The cartel ramped production fully, leaving no spare capacity.

Concerns around tight oil growth and the electric car exacerbated OPEC’s new approach.

We have high conviction that oil prices are poised for a major recovery over the coming years.


Ascent Oil Fund:

We believe The Ascent Oil Fund is well-positioned to capture this significant upside and should outperform the relevant indices.

The Ascent Oil Fund team has 45 years of collective experience analyzing oil companies and energy markets.

Our fund has low cost management fees and performance fees are only paid if returns exceed the index.

Self correcting mechanisms in the energy sector historically have led to a recovery and rebalance in the oil markets on both the supply and demand sides.

FUND STRUCTURE

The Ascent Oil fund is an efficient vehicle to take advantage of the coming recovery in the oil price. Unlike many of the energy ETFs:

  • The fund owns no major oil companies as their business model has been challenged.
  • The fund owns no natural gas focused E&P companies as a natural gas price recovery has additional uncertainties.
  • The fund has minimal exposure to the oilfield service sector as a recovery in that sector has additional uncertainties.


All of the companies in the fund are primarily oil producers focused on land activity. The fund is long only with 15- 20 positions.


FUND HISTORY

The Ascent Oil Fund was originally launched in Q4 2015 at Henderson Global Investors. At year-end 2017, Mark Gordon partnered with the team at Lone Star Value Management, LLC (“LSVM”) and the fund’s management was transferred to LSVM.

THE ASCENT OIL FUND TEAM