Investment

Chart of the Month – Conversation with an energy L/S portfolio manager

by Alexis Sautereau

Conversation with an energy L/S portfolio manager

Source: UBS

The Global Energy Sector is still very cheap vs history – which differs from the broader market (charts below which compare relative valuations between different sectors and the broader market, Energy is still trading at 11.8x P/E, a discount to historical averages vs. the broader market trading at ~20x, a premium).

So potentially plenty of room for relative multiples to normalize value vs. growth, especially given the focus from energy management teams on return on and return of capital (the space is set to see >20% ROCE over the coming years, which competes with any market sector, as well as in some cases double digit return of capital yields). This compares to other ‘stimulus driven’ sectors where there is a pull forward of demand – ie, cons discretionary and info tech which are still elevated vs. historical valuations.

The chart below illustrates Energy Market Cap as percent of S&P, still close to the lows: 4% vs. 20 year average of 8%. This shows the degree of valuation disconnect vs. both historical measures and the broader market.

 

 

 

 

 

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Antonio Mira
CHIEF FINANCIAL OFFICER, MEMBER OF THE EXECUTIVE COMMITTEE

Antonio Mira joined NS Partners in 2006 as Group Chief Financial Officer. He heads the corporate functions and is involved in coordinating and implementing the decisions of the Executive Committee.
An experienced bank auditor, Antonio started his career in 1995 with Arthur Andersen, where he worked for some 7 years before joining Ernst & Young in 2002 as a Senior Manager.
Antonio is a Swiss chartered accountant and a Business graduate of Lausanne University (HEC).

Sébastien Poiret
DEPUTY HEAD OF WEALTH MANAGEMENT

Sébastien Poiret joined NS Partners in 2008 and manages funds of hedge funds and private client mandates. He also oversees the development of the Group’s offices in Mauritius.

Prior to joining NS Partners, he served as a Trader, Head of Manager research and Portfolio Manager in the USA and Switzerland for a single hedge fund (1998-2004) and for Optimal (2004-2008), Grupo Santander’s fund-of-hedge funds operations.

Sébastien holds a Bachelor’s degree in Corporate Finance from the ESPEME Business School (EDHEC Group) and an MBA in Finance and Economics from the Institute of Business Administration, both in Nice.

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Abir Oreibi joined the Board of the NS Partners Group in 2018, where she brings her truly international perspective and rich experience.
Among many other ventures, Abir set up Alibaba.com’s first European office. After living and working in Shanghai, Hong Kong, Bangkok and London, she now lives in Geneva, where she is CEO of Lift Events, an organization that identifies technology trends, their business and social impact through the organization of events and open innovation programs. Issues related to the challenges and opportunities created by new technologies as well as the strategic responses from organizations are at the heart of Lift’s activities.
Abir holds a BA in Political Sciences from the University of Geneva. She is an investor, and member of advisory and innovation boards.

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Romain Pidoux joined NS Partners in 2011 and heads the Group’s Risk Management.
He started his financial career in 2005 as Head of Quantitative Analysis for a Swiss Family Office, selecting funds and managing portfolio allocation. In 2008, he switched to the alternative world and joined Peak Partners as hedge funds analyst.
He is a Chartered Alternative Investment Analyst (CAIA) and holds a Master’s degree in international relations from the Graduate Institute of International Studies at Geneva University.

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