Well-known energy investor T. Boone Pickens, Jr., sure is busy these days. Last week, not only was he at the University of Texas at Dallas warning the U.S. natural gas supply was going to run out in a quarter-century or so, but he also made the headlines for a new energy investment fund. From David Milstead of the Globe and Mail (Canada) on Friday:

U.S. energy magnate T. Boone Pickens plans to give Canadian investors a chance to piggyback on his investment strategies – for a price.

Mr. Pickens, in conjunction with BMO Nesbitt Burns, has filed a prospectus for the T. Boone Pickens Energy Fund.

The closed-end fund will have an investment strategy “substantially similar” to Mr. Pickens’ BP Capital Energy Equity Fund, according to its prospectus. It will focus on highly liquid energy stocks and commodities, taking both long and short positions, and using up to 30 per cent leverage to goose returns.

While the fund’s shares are registered in Canada and intended only for Canadian investors, the fund has no geographic restrictions on its investments…

BMO Nesbitt Burns, as the administrator, will collect 2 per cent of the fund’s net asset value each year as a fee. It will then pay Mr. Pickens’ investment team, TBP Investments Management, from the proceeds.

If the fund increases its net asset value over the course of the year, 20 per cent of the gain goes to BMO Nesbitt Burns and the Pickens investment team.

Upfront sales fees and other expenses will further reduce the initial value of the fund.

Each $10 “combined unit” comes with a unit in the fund, plus a warrant to purchase another. Mr. Pickens says he intends to own 10 per cent of the fund.

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Source:

“Pickens plans Canada energy fund”
David Milstead
Globe and Mail (Canada), November 6, 2009

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