It warrants a Low Parent rating.
Co-founders Murray Stahl, Peter Doyle, and Steven Bregman jointly run the firm, but a massive firmwide position in a single stock overwhelms positives that come from the research team. Nearly a third, or $2.2 billion, of the firm’s $6.8 billion of assets under management as of June 2022 rested in a single stock: Texas Pacific Land TPL, a $13-billion-dollar real estate trust that owns vast tracts in Texas and earns royalties off grazing and oil leases. The stock accounts for more than 50% of assets in some strategies, which raises obvious risk-management and liquidity concerns should the stock sell off or the firm experience significant outflows. Additionally, there are conflicts of interest with firm CEO/CIO Stahl, as he is compensated by Texas Pacific Land for his seat on the board and is personally invested in the company.
High fees across the fund lineup, a smattering of questionably timed fund launches, and the overhaul and renaming of strategies raise additional concerns. The firm saw multiple strategy closures during the dot-com bubble, and it has a history of launching products that seemingly chase fads and short-term asset flows.