Simon Lack: An In Depth Look At The US Pipeline Industry

ValueWalk’s Joshua Rarrick interviews with Simon Lack of SL Advisors, that takes an in depth look at the US pipeline industry. Find out why the US will soon export more energy products than we consume, and why now is a great time to invest in the energy sector.

Q1 hedge fund letters, conference, scoops etc

Interview with Simon Lack

Transcript

Josh: I’m here this morning with Simon Lack from SL Advisors for Value Walk. We’re going to be talking about how oil and gas growth within the U.S. pipeline was affected by geopolitics and trade wars with China. I would just encourage everybody to stick around and listen to this, it’s going to be a great podcast. Simon, if you would just introduce yourself, tell us a little bit about you and SL Advisors?

Simon: Sure, Josh, thanks. Nice to be on the show. Well, SL Advisors is ten years old. I set it up when I left GP Morgan. I spent 23 years at GP Morgan. That time was about two thirds in interest rate trading and then one third in a hedge fund business, where I invested in new startup hedge funds. I got involved in the energy sector back in 2005 when I was at GP Morgan, I provided early-stage financing for a hedge fund called Alarian Capital Management, which invests in energy infrastructure pipelines and storage facilities and all the physical infrastructure that moves oil and gas from the well-head to the customer.

I really found it a fascinating sector, so when we setup SL Advisors in 2009, that was a key area of focus. We’ve really stayed involved in that. As I say to people, we’re narrow and deep. We just focus on energy infrastructure, it’s all we think about, we write about it regularly, and it’s where we invest our client’s money, so that’s really the background.

Josh: Great. Yes, obvious from reading through the forum posts that you’re very knowledgeable on the energy sector. You’ve definitely done your homework and you understand how it works. Now, I’ve been reading through some of your articles from both recently and back a few months. In one particular article, titled: The world needs natural gas, not this Sierra Club, you mentioned that VP expects the demands for natural gas to grow 1.7 percent on a global scale annually. Now, this contradicts what we hear in the mainstream media, where the push for solar and wind energy is being powered by big money and politics. Why does the data contradict what we’re being told by the media in terms of the need for natural gas versus renewable energy?

Simon: Climate change is a real issue. Although, we invest in business that move fossil fuels, climate change is something that’s important, it’s real, and we think about it all the time. There are two conflicting issues here at work. One is that developed countries like the United States, in many cases, want lower carbon emissions. Developing countries, particularly China and India, want to use more energy. That’s because at low levels of income, low levels of per capita GDP, increases in energy use directly lead to higher living standards. Actually, better health, longer lifetimes for people.