Encompass Capital Advisors LLC (“Encompass”) manages an equity hedged investment strategy, primarily focused on the energy eco-chain, including exploration and production, services, energy-related industrials, cyclicals, materials, alternative energy and renewables. We strive to embrace the secular transformation to clean energy and low carbon solutions. Our goal is to achieve absolute, uncorrelated returns to the broad market and the energy sector (over market cycles). Encompass was established in 2012 by Portfolio Manager Todd Kantor, who has over 20 years of energy investing experience.
We aspire to build a preeminent asset management firm with a proven and scalable investment process that is deeply rooted in combining rigorous fundamental research with advanced data analytics. With a focus on generating alpha, we seek to deliver uncorrelated and differentiated returns throughout the energy eco-chain and the broader equity market. Our core values serve as pillars to build an enduring organization that strives to be the best, but not the largest.
ALIGNMENT OF INTEREST
We reinvest a large portion of our management fees back into the firm, directly aligning our interests with those of our investors. Our investment professionals’ compensation is linked to generating alpha and a material portion of their annual bonus is deferred and invested in our strategy.
We are committed to good citizenship, including promoting sustainable practices as we strive to be part of the solution. Recognizing our presence in the global community, we are actively working towards making a positive impact. Our investment process seeks to incorporate transforming technologies in the energy eco-chain.
TECHNOLOGY AND INNOVATION
Idea generation has been underpinned by our framework of integrating fundamentals with quantitative data analytics and focusing on key determinants that drive rates of change. We believe that our differentiated analysis builds a competitive advantage. Our suite of risk analytics evaluates various dimensions of portfolio risk, including factor exposures, stress testing, scenario analysis and alpha benchmarking.
We seek to hold ourselves to the highest ethical and compliance standards. Our team strives to promote a culture that is centered on excellence, integrity, humility and respect. Furthermore, we are committed to implementing the best industry practices throughout all aspects of our business.
We believe that our investable universe offers compelling alpha opportunities with extensive public data, significant earnings revisions and continuous rates-of-change in production, asset values, operations and technologies. With a high dispersion in stock prices, our strategy is underpinned by our focus on identifying evolving “winners” and “losers” throughout market cycles. We seek to limit directional market calls and to maximize our fundamental company research. Developing global relationships with public and private market participants is important for us to understand industry trends and risks. Encompass strives to exhibit high integrity and be viewed as thoughtful investors by companies.
and Data Science
Since the strategy’s inception, we have incorporated statistical analytics to extract and model large quantities of public data across the global energy patch. With a dedicated data scientist supported by an external team of coders, we source traditional and alternative datasets from a multitude of agencies and other sources. Utilizing predicative modeling, visualization and statistical techniques, signals are transformed into actionable observations, fundamental themes and trends. Our quantitative framework is augmented by deep fundamental company analysis, detailed modeling and commodity analytics.
Encompass seeks to expand the breadth of our datasets, while improving the speed, accuracy and sophistication of our analytics. The combination of analytical rigor, comprehensive fundamental analysis, industry experience and the pursuit of excellence drive us forward.