Friday, March 24, 2017

Norwegians Buying Oil Assets, Clocking Big Percentage Gains

From Bloomberg, March 23: 

Hedge Fund Run by Former 'Big Wolf' Trader Delivers 46% Return
Two former associates of billionaire shipping and rig tycoon John Fredriksen are delivering out-sized returns by snapping up distressed and shunned oil-related assets. And they say it’s a bet that has plenty of room to run.

Titan Opportunities Fund, set up by Espen Westeren and Fredrik Halvorsen, has returned 46 percent in its first nine months. Now, they want to step up their bets by raising as much as $175 million. The goal: double or even triple the money in the next three to five years, with an annual return of at least 30 percent, before returning it to investors.

“The opportunity is now,” Westeren, the fund’s chief investment officer, said in a phone interview. “We’ve had an almost unprecedented down-cycle, which has been very brutal. We believe we will see an upturn that will last a few years.”

Battered by the a collapse in crude prices due to a global glut, oil companies reduced investments by more than 40 percent from 2014 to 2016, dragging the industry into the deepest downturn in a generation. Valuations dropped for both producers and the companies that provide them services ranging from engineering to drilling, and forced many to the brink of bankruptcy or beyond.

The crash laid the ground for Titan, which Westeren, 38, and Halvorsen, 43, started in June with almost $50 million. By the end of February, the fund had grown to more than $72 million, according to the latest monthly report.

“We believe we’ve just passed the bottom and that 2017 will be the first year of rising activity,” Westeren said. “We’re investing in the companies that will benefit from a recovery in oil investments.”
Besides picking cheap energy stocks and bonds, the London-based investment team will rely on its network to gain access to private placements and other deals.

Westeren, a Norwegian, worked for Fredriksen -- known as “Big Wolf” in the industry -- from early 2010 to late 2015, managing the billionaire’s private investments from the group’s Sloan Square offices in London. He now heads an investment team of four that includes John Dellanoce, who worked with distressed investing at Goldman Sachs Group Inc. for 10 years to August 2015....