In a rare fit of risk management, E&P management teams have keyed in on what they deemed “dangerous pro-cyclicality” in their pension fund holdings. A large Permian Basin E&P rolled out its new investment strategy as a part of a holistic view of risks pensioners face. One executive at the firm said, “Look, realistically, half these guys are gonna be gone by the end of the year. It’s just the way it is. So we decided to invest based on this. It’s called â€˜Creating Your Own Catalyst.’ The hedge funds love it.”
The new portfolio is invested counter-cyclical to the energy market. Technology stocks? Nope. Green energy? Guess again. The fund’s largest positions are in a string of Midland drive-thru liquor stores, children’s sandbox manufacturers, and scrap metal recyclers. It has also purchased a non-operating interest in Jim Adler’s legal practice.
When questioned about the ESG considerations in the portfolio, managers said, “We’re just doing what’s best for our pensioners. We would short our own stock, but the SEC won’t let us, so this is the next best thing.”
Rumors are spreading that the fund is looking into a bulk buy of over 1,500 used Ford Raptors out of the Midland-Odessa area, intending to flip them as soon as oil goes above $50 again, although these reports are unconfirmed.