Top Midstream and Downstream Oil and Gas Picks by Fund Gurus Concentrated in the Sector

 |  Includes: ANW, CVI, IOC, NSH, SEP, SUN, WPZ
by: GuruFundPicks
What do the top Hedge Fund and Mutual Fund Gurus like in the Midstream and Downstream Oil and Gas group? Through research of the latest available institutional 13-F filings, this article identifies the Gurus who are most invested in the Midstream and Downstream Oil and Gas group, and the specific stocks within that group that they prefer to hold in their portfolios. The group includes midstream Oil and Gas companies such as Transportation, Storage and Pipeline companies; and downstream Oil and Gas companies such as Refining and Marketing companies.

This article is the thirty-seventh in a series, and this article will be among the last in this series as the latest March 2011 quarter 13-F Institutional filings are now almost complete. Later this week, I intend to publish the ‘Top New and Added Picks’ of Guru Funds by industry / sector detailing this time not the top holdings, but more importantly what ‘New’ positions they took and what existing positions they added to in the latest March 2011 quarter. Please check my article page for previous articles in this series.
A Guru is defined as someone who is regarded as having great knowledge, wisdom, and authority in a certain area. When it comes to hedge funds, there are a number of ways to anoint leading managers as Gurus, including long-term performance, low portfolio volatility and an elite reputation in the investment community.
Many of us are familiar with leading investors and hedge fund managers such as Warren Buffett, George Soros, Carl Icahn and Julian Robertson, but the hedge fund community alone includes over 9,000 funds; add in mutual funds, ETFs, and other investment entities, and the number is likely to be at least two to three times that number. While there is no official list of Gurus, less than one percent or between 100 to 200 fund managers are commonly believed by the larger investment community to have earned the distinction of being called Gurus.
The study of the investing habits of Gurus can be informative as these are very savvy, well-respected investors with a high personal net worth deploying large sums of capital from their funds regularly. They have a long-term track record of success, and while one can easily just ride their coattails, the savvy investor may want to use these lists as a starting point to conduct their own due diligence.
The total capitalization of the U.S. Equity markets is somewhere in the $15 trillion range, and the total market capitalization of leading Oil and Gas Pipeline, Storage, Transport, Refining and Marketing companies is $220 billion or 1.5% of the overall market. The Table lists the top six investment Gurus whose funds have invested at 1% or higher in the group. The following are their leading picks in that group:
  • Interoil Corp. (NYSE:IOC) engaged in the refining, liquefaction, marketing and distribution of oil and natural gas in Papua New Guinea.
  • Sunoco Inc. (NYSE:SUN) engaged in the refining, manufacturing and marketing of petroleum and related products in the United States.
  • CVR Energy Inc. (NYSE:CVI) engaged in the refining and marketing of petroleum products in KS, OK, MO, NE, and CO.
  • Spectra Energy Partners (NYSE:SEP), an MLP engaged in the transportation and storage of natural gas in the Southeastern U.S., OK, AK, MI, TX, LA and VA.
  • Williams Partners LP (NYSE:WPZ) engaged in the gathering, transportation and processing of natural gas, and the fractionation and storage of natural gas liquids.
  • Nustar Group Holdings LLC (NYSE:NSH), an LLC that owns a 2% General Partner Interest and 100% of incentive distribution right in Nustar Energy LP.
  • Aegean Marine Petroleum (NYSE:ANW) supplies and markets refined marine fuel and lubricants to the worldwide shipping industry.

Fund and Guru
Type of Fund
Assets Under Management
Percent Equity Portfolio invested in Midstream and Downstream Oil and Gas Companies
Major Oil and Gas Midstream and Downstream company positions in Portfolio
Soros Fund Management LLC (George Soros)
Hedge Fund - Long/Short
$ 5.1 billion
Perella Weinberg Partners Capital Management LP (Dan Arbess)
Hedge Fund - Multi-Strategy
$ 4 billion including over $1 billion in Equities
Third Point LLC (Daniel Loeb)
Hedge Fund - Shareholder Activist
$2.1 billion
Barrow Hanley (James Barrow)
Mutual Fund
$ 47.3 billion
First Eagle Investment Management, LLC (Jean-Marie Eveillard)
Mutual Fund
$ 19.7 billion
Schneider Capital Management Corp. (Arnold Schneider) Mutual Fund and Separate Accounts - Deep Value $ 1.8 billion 1.1% ANW
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Mr. Soros is a Hungarian-born renowned American investor, most famous for his spearheading the Quantum Fund that is believed to have single handedly broken the Bank of England in 1992, forcing them to devalue the pound. At the time Soros established the Quantum Fund, a mere $1,000 invested in 1969 would have been worth $4 million by the year 2000, achieving a cumulative return of 32%.
Perella Weinberg Partners, a hedge fund, founded by Joseph R. Perella and Peter Weinberg in 2006, has $4 billion AUM, including over $1 billion in equities, and employs a multi-strategy approach.

Hedge Fund Third Point LLC, founded by Daniel Loeb, is a shareholder activist, meaning that they take large stakes in target investments and then use their influence resulting from the ownership to affect change at these companies, with the objective of eventually selling them for a tidy profit.

Jean-Marie Eveillard is Senior Investment Adviser for First Eagle Investment Management, a $19.7 billion Mutual Fund company. He served for more than a quarter century as a portfolio manager, and was co-honored in 2001 by Morningstar, Inc. as "Stock Manager of the Year." He invests using a bottom-up value-oriented approach.

Wayne, PA-based Schneider Capital Management, founded in 1996 by Arnold Schneider, offers four value-style strategies based on a fundamental approach to investing, and caters to approximately 27 separate account clients and several thousand mutual fund shareholders. They focus on equities throughout the Capitalization range and offer strategies ranging from small to large cap equity strategies.
Disclaimer: Material presented here is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities. Before buying or selling any stock you should do your own research and reach your own conclusion. Further, these are my opinions and I may be wrong. I may have positions in securities mentioned in this article. You should take this into consideration before acting on any advice given in this article. If this makes you uncomfortable, then do not listen to my thoughts and opinions. The contents of this article do not consider your individual investment objectives so consult with your own financial adviser before making an investment decision. Investing includes certain risks, including loss of principal.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.