From what I have read, I understand oil rigs in production have fallen 1500 to 500 over the past year in the US, while the level of output has stayed the same. Was wondering if anyone had any thoughts on what the impact would be to PAC and the Seizert fund that had invested $5.8 Billion in 2015, now $4.97 Billion as at the latest FUM Report 31-12-2015.
I know other companies would be feeling the pinch more directly like BHP, WOR or CDD, however wondering about thoughts on the indirect impacts to companies that invest in this space like PAC and the funds it owns. Note, I understand they also invest in farms over the long-term too. What would happen if they lost another $2 Billion in FUM in Seizert due to oil bankruptcies?
The key concern for the impact is that industry experts are saying that there is likely to be a range of bankruptcies in the space Seizert invest in from 60 over the past year, increasing to another 150 this financial year. To avoid bankruptcies, the WTI price per barrel needs to average above $45 per barrel.
My thought is that PAC generates revenue roughly 0.08 of a percent (0.0008 or 0.08%) at the most from Funds Under Management in a given year (for those funds they have equity holdings in). It has been as high as 0.088 of a percent since 2011. A lot of their revenue earnings come from capital gains and this has the potential to significantly impact Seizert's value.
There are other funds they have an equity positions in that are doing well. Just concerned about one of their leading investments (they even increased their position at the beginning of 2015 when the industry deteriorated even further.
Does anyone know they breakdown of the Investment in the Oil industry versus Farm industry?
Best of Luck
Lost
PAC Price at posting:
$5.88 Sentiment: Hold Disclosure: Held
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