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1.54 MB
Extraction Summary
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People
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Organizations
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Locations
2
Events
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Relationships
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Quotes
Document Information
Type:
Financial white paper / investment analysis
File Size:
1.54 MB
Summary
This is page 6 of a confidential financial white paper produced by Electron Capital Partners, LLC, specifically marked for the exclusive use of Jeffrey Epstein. The document analyzes the global utility sector, arguing that it is substantially underweight in investment portfolios but showing signs of increased hedge fund exposure starting in 2012. It cites data from Bank of America Merrill Lynch and Goldman Sachs to support the thesis that utilities are currently under-owned relative to other sectors.
People (1)
| Name | Role | Context |
|---|---|---|
| Jeffrey Epstein | Recipient/Client |
Watermark at bottom left states 'For exclusive of Jeffrey Epstein'
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Organizations (4)
| Name | Type | Context |
|---|---|---|
| Electron Capital Partners, LLC |
Firm name listed in the footer of the document
|
|
| Bank of America Merrill Lynch |
Source of data for Global Fund Manager Survey referenced in charts
|
|
| Goldman Sachs |
Source of data regarding hedge fund exposure and 'Hedge Fund Trend Monitor'
|
|
| House Oversight Committee |
Implied by the Bates stamp 'HOUSE_OVERSIGHT_024207'
|
Timeline (2 events)
2012-06-01
Inflection point where hedge funds began increasing net exposure to global utility sector
Global
Hedge Funds
Relationships (1)
Watermark stating 'For exclusive of Jeffrey Epstein' on Electron Capital Partners document.
Key Quotes (3)
"hedge funds increasing their net exposure to the global utility sector after a long period of reducing net."Source
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Quote #1
"utilities account for the lowest in gross assets held of the 10 global sectors."Source
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Quote #2
"For exclusive of Jeffrey Epstein"Source
HOUSE_OVERSIGHT_024207.jpg
Quote #3
Full Extracted Text
Complete text extracted from the document (2,463 characters)
Global Utility White Paper CONFIDENTIAL
Global Sector Positioning
[Chart: Bar graph showing sector positioning. From top to bottom: Tech, Industrials, Insurance, Pharma, Discretionary, Materials, Energy, Banks, Staples, Telecoms, Utilities. Arrow points to Utilities labeled 'Substantially underweight'. X-axis ranges from -40 to +35 <= underweight // overweight =>]
Source: Bank of America Merrill Lynch Global Fund Manager Survey, Feb 12, 2013
[Chart: Bar graph showing sector positioning. From top to bottom: Tech, Industrials, Insurance, Pharma, Discretionary, Materials, Energy, Banks, Staples, Telecoms, Utilities. Arrow points to Utilities labeled 'Substantially underweight'. X-axis ranges from -40 to +35 <= underweight // overweight =>]
Source: Bank of America Merrill Lynch Global Fund Manager Survey, Feb 12, 2013
Net % Overweight Global Utilities
[Chart: Line graph ranging from 2003 to 2013. Date '8/2/13' in top right. Labels include '+1σ underweight vs mean', '-1σ underweight vs mean', 'Red circle = crossing below 1σ underweight'. X-axis years: 2003, 2004, 2005, 2006, 2007, 2008, 2009, 2010, 2011, 2012, 2013. Legend: Net % Overweight Utilities, Sector Relative to World(R.H.SCALE), Potentially Overowned]
Source: Bank of America Merrill Lynch Global Fund Manager Survey, Feb 12, 2013
[Chart: Line graph ranging from 2003 to 2013. Date '8/2/13' in top right. Labels include '+1σ underweight vs mean', '-1σ underweight vs mean', 'Red circle = crossing below 1σ underweight'. X-axis years: 2003, 2004, 2005, 2006, 2007, 2008, 2009, 2010, 2011, 2012, 2013. Legend: Net % Overweight Utilities, Sector Relative to World(R.H.SCALE), Potentially Overowned]
Source: Bank of America Merrill Lynch Global Fund Manager Survey, Feb 12, 2013
The sector has been not only a substantial long-only underweight, but also a wholesale short for many macro/generalist hedge funds. However, it is very interesting to note that an inflection point appears to have occurred in the middle of 2012, with hedge funds increasing their net exposure to the global utility sector after a long period of reducing net. The long/short ratio of utility stocks held by hedge funds fell from 3.0x in Jan 08 to about 1.7x in Jan 12 (4 years), but has since risen by 60% to 2.7x, which is more than twice the increase for hedge funds’ overall net exposure during the same period (source: Goldman Sachs).
Based on discussions with the Street, it appears that this short exposure has been expressed via ETFs, regional utility indices or large bellwether index utility proxies. Individual name crowdedness has continued to remain at a low level (e.g., utilities rarely show up Goldman Sachs Hedge Fund VIP list – ticker GSTHHVIP). Today, utilities account for the lowest in gross assets held of the 10 global sectors. (Source: Goldman Sachs Hedge Fund Trend Monitor analysis of 700 hedge funds with $1.3 trillion in gross assets.)
In addition, global QE programs have boosted demand for higher-beta stocks, which has contributed to the recent relative underperformance of and lack of interest in utilities. However (see below), the underperformance of US utilities has diminished with each successive QE round (QE1
6 Electron Capital Partners, LLC
For exclusive of Jeffrey Epstein
HOUSE_OVERSIGHT_024207
For exclusive of Jeffrey Epstein
HOUSE_OVERSIGHT_024207
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