Energy specialist firm HITE Hedge Asset Management outperformed in March despite some of the worst drawdowns some oil traders have ever seen. HITE Energy was up +6.10% in March and is up 0.26% YTD. HITE Carbon Offset was up 22.32% in March and is up 32.93% YTD. Finally, HITE Hedge was up approximately 1.5% in March, according to investor materials reviewed by Opalesque.
HITE offers a suite of niche energy funds. The HITE Energy fund, which launched in February of 2018, is a systematic relative value strategy that limits commodity exposure and focuses on finding opportunities throughout the energy value chain. HITE Carbon Offset, which also launched in 2018, is a market-neutral carbon strategy. The fund shorts legacy parts of the carbon value chain and puts a greater emphasis on energy transition opportunities. HITE Hedge, the firm’s flagship fund, launched in 2004 and has a concentrated portfolio with a midstream focus.
The fund sees opportunity in the energy sector right now despite oil prices falling through the floor. HITE notes that billions of relative value capital have left the space. With the combination of volatile price action and a liquidity squeeze in high yield, there are opportunities for energy specialists to find value. The volatility in oil markets is also helping to highlight the need for more sustainable energy which is driving returns in the carbon offset strategy.
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