It seems that every investor cares about initial public offerings.  And everyone still seems to care about what T. Boone Pickens thinks about the price of oil and what his views are on fixing the US dependence upon on foreign oil.  It turns out that  T. Boone Pickens actually has an IPO of an energy fund.  This one is called the T. Boone Pickens Energy Fund.  The fund might not be the easiest for access by American investors as this is being launched in Canada.  This is on the heels of Pickens calling for $90 oil this week.

The closed-end fund, T. Boone Pickens Energy Fund, has now completed its IPO of Class A Combined Units, Class F Combined Units and Class U Combined Units and a private placement of Class I Combined Units. The Fund raised gross proceeds of over $27.6 million under its offerings.  This may be deemed a disappointment considering that the December-2009 prospectus said that the fund would be for a maximum of $200 million, while the minimum offering was listed as $20 million.

LISTING DETAILS: The Class A Combined Units are listed on the Toronto Stock Exchange under the symbol TBP.A; the Units and Warrants making up the Combined Units will separate immediately after the earlier of the closing of the final exercise of the over-allotment option granted by the Fund to its agents or 30 days after the closing of the initial public offering. Following such separation, the Class A Units and the Class A Warrants will trade on the Toronto Stock Exchange under the symbols TBP.UN and TBP.WT, respectively. Each Warrant entitles its holder to purchase one Unit of the class at a subscription price of $10.00 (or US$10.00 in the case of a Class U Warrant or a Class I Warrant) on April 29, 2011. Warrants may be tendered for exercise on and after April 18, 2011 and up to April 29, 2011 (being the two-week period up to and including the expiry date for the Warrants).  Warrants not exercised by April 29, 2011 will be void and of no value.

The goal and objective of the fund is to “provide investors with the opportunity for long-term capital growth by providing access to the energy-related investment strategies of TBP Investments Management LLC.”  The Fund will invest the net proceeds of the offerings in an actively managed portfolio consisting primarily of equity and commodity-related investments in the energy and energy-related sectors.

The Portfolio Manager and its management team are led by T. Boone Pickens.  TBP Investments Management LLC, had total assets under management of about $400 million as of September 30, 2009.  The Fund may utilize leverage through use of a loan facility or margin purchases, in an amount of up to 30% of the NAV of the Fund at the time of the borrowing.  Portfolio Investments from the prospectus are as follows:

• The Portfolio Manager believes that over the long-term, the oil and gas sector will provide a favourable environment for growth and attractive investment opportunities due to a combination of depleting oil and gas reserves, global demand growth and ongoing geopolitical instability. In the near to mid-term, the Portfolio Manager believes that recent reductions in planned capital spending, as well as decreases in oil and gas production by the Organization of the Petroleum Exporting Countries, will result in production shortfalls that will provide support for oil and gas prices.
• The Portfolio Manager expects that the Fund’s equity investments will typically consist of liquid stocks that trade on major exchanges, with the majority of equity investments being in U.S. and Canadian companies. Sectors included in the energy and energy-related universe include integrated energy companies, energy service companies and drillers, exploration and production companies, refiners, energy dependent companies and alternative energy companies.
• Commodity exposure will generally be acquired through liquid futures and option contracts that trade on the New York Mercantile Exchange or over-the-counter. Futures investments can be expected to be focused on natural gas, Brent Crude and West Texas Intermediate (WTI) crude oil.

The offering syndicate was led by BMO Capital Markets, and the syndicate included the following: CIBC, RBC Capital Markets, TD Securities Inc., Blackmont Capital Inc., Canaccord Financial Ltd., Desjardins Securities Inc., Dundee Securities Corporation, HSBC Securities, Raymond James, GMP Securities, Manulife Securities, Wellington West Capital Markets, and Research Capital Corporation.

Pickens recently just shut down the plans for his huge wind power project in northern Texas.  The size of this fund might not make a great all around week for him.  Maybe Pickens should have thrown in an IPO plug-in his new commercial campaign for the Pickens Plan.

You are invited to join our free daily email distribution list to hear about IPOs and secondary offerings, ongoing day trader and options trader alerts, analyst upgrades and downgrades, stock and market rumors, Buffett and guru investor news, M&A and more.

JON C. OGG

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.