Mariner Investment Group Powers Up On Energy Stocks In Q2

Mariner Investment Group LLC is a New York-based hedge fund vehicle founded by William J. Michaelcheck in 1992. Mariner and its affiliates advise single and multi-strategy hedge funds and funds of funds, as well as provide other alternative investment products and services. In late-June, Basil C. Williams stepped down from his position as co-chief investment officer of the alternative investment firm due to failed negotiations to renew his contract, so Mr. Michaelcheck became the sole CIO. The firm is a subsidiary of publicly-owned, Tokyo-based global financial services company ORIX Corporation, which owns a non-controlling majority ownership stake in Mariner Investment Group, with the hedge fund’s current and former principals owning a substantial minority interest.

Having briefly described the history of Mariner Investment Group, let’s discuss the hedge fund’s bullish stance towards the energy sector during the second quarter. The New York-based asset manager made a number of energy-related additions to its portfolio during the period, as well as boosted several existing energy-related positions. Mr. Michaelcheck’s investment firm oversees a $296.04 million portfolio as of the end of the second quarter, with energy investments accounting for 14% of the portfolio’s value. With that in mind, let’s see which energy stocks Mariner Investment was buying in the second quarter.

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Antero Resources Corp (NYSE:AR)

– Shares Owned by Mariner Investment Group (as of June 30): 83,400

– Value of Mariner Investment Group’s Holding (as of June 30): $2.17 Million

Mariner Investment Group LLC acquired a new stake of 83,400 shares of Antero Resources Corp (NYSE:AR) during the second quarter of 2016, which was valued at $2.17 million on June 30. The shares of the independent oil and natural gas company are up by 24% since the beginning of 2016. The company’s drilling opportunities are focused in the Marcellus Shale and Utica Shale of the Appalachian Basin. In early-June, Antero Resources agreed to acquire roughly 55,000 net acres on the core of the Marcellus Shale for $450 million. The transaction is set to close during the third quarter of this year. The company’s second quarter revenue excluding unrealized hedge losses was $728 million, up by 27% year-over-year. Antero Resources posted a $977 million non-cash loss on unsettled hedges for the quarter, reflecting rising natural gas prices. Stephen J. Errico’s Locust Wood Capital Advisers owns 613,890 shares of Antero Resources Corp (NYSE:AR) as of June 30.

Spectra Energy Partners LP (NYSE:SEP)

– Shares Owned by Mariner Investment Group (as of June 30): 149,500

– Value of Mariner Investment Group’s Holding (as of June 30): $7.05 Million

The New York-based hedge fund manager added a 149,500-share position in Spectra Energy Partners LP (NYSE:SEP) to its portfolio during the April-to-June period. The position was worth $7.05 million at the end of the second quarter and accounted for 2.4% of the value of the firm’s equity portfolio. The pipeline and natural-gas storage company has seen the value of its shares jump by a little less than 2% since the start of the year. Operating revenue from Spectra Energy Partners, the company’s largest business that focuses on providing transmission, storage and gathering of natural gas, was $618 million in the second quarter, up from $603 million recorded a year earlier. The increase was mainly attributable to expansion projects. The company’s Board recently approved a quarterly cash distribution of approximately $0.664 per share, which marked the 35^th consecutive quarterly increase to its cash distribution. The latest quarterly distribution provides an annual yield of 5.48%. Jim Simons’ Renaissance Technologies LLC was the owner of 310,200 shares of Spectra Energy Partners LP (NYSE:SEP) at the end of March.

The second page of this article will reveal three other energy-related equity investments favored by Mariner Investment Group.