Newton Global Natural Resources Equity Strategy

Learn about what Dave Intoppa and Brock Campbell do at Newton and their route into investment management.

Newton’s portfolio manager David Intoppa discusses his background, current role and market outlook.

Dave is a portfolio manager on the Global Natural Resources and Large Cap Core Equity strategies and a senior research analyst covering several cyclical industries across sectors. Dave joined Newton in 2021 and BNY Mellon Investment Management in 2006.

Tell us a little about your background.

I have been a value investor for roughly 20 years and have been looking at the energy and commodity space for almost just as long. I studied economics as an undergrad at Tufts University and earned my Master of Business Administration in finance and accounting at New York University. I love math and problem solving. Before BNY Mellon and business school, I worked for three years at State Street Research and Management where I was trained by legendary energy analysts Dan Rice and Denis Walsh.

How would you characterize your style as a portfolio manager?

Our team takes a long-term view, but me specifically, I am a value manager at heart. I think that style of investing really plays well within global natural resources. I look for companies that are inexpensive, have solid business fundamentals and most importantly, improving business momentum, or a catalyst, to force the market to recognize the value.

What outside experiences or past experiences have helped shape your perspective?

I am a city kid, so I think I naturally developed ‘street smarts.’ Having a level of common sense is highly valued where I am from. I believe this has helped me interact with diverse management teams, interpret body language and be able to read between the lines as to what the goals of the companies are and how they are performing.

How would you describe Newton’s team environment and collaborative approach?

In my view, Newton is built around collaboration. We have a very specific pod structure, which is different than a lot of asset managers. The pod structure breaks down silos between analysts, allowing for constant back and forth. As an energy analyst, I am very interested in the work of our consumer analysts, how it relates to demand and so forth.

What is the most interesting part of your day?

It changes depending on the day. Every morning we have a rapid-fire style meeting where analysts share topical areas of interest. It is a nice summary of what is on people’s minds and what is important in the market.

I also talk to many companies to learn about their management style, culture and how they aim to succeed. I find talking to the people who are in the day-to-day intriguing.

When evaluating a company, what metrics or qualities do you value the most?

I think the ultimate measure of a company’s value is free cash flow and return in the form of dividends and buybacks to investors. For example, I would have conviction in a stock that, while having a few down years, is priced accordingly and is at a point where I believe its free cash flow is about to inflect.

What opportunities or themes are you most excited about in the natural resources space?

I think we are early in a supply-driven cycle. Cycles in this area tend to last about 10 years, and the current bull cycle kicked off in 2020. After a decade of very poor performance from the equities and the returns that these companies were throwing off, shareholders revolted and started demanding higher returns on and off capital. Companies that are now being paid to increase returns on and off capital are creating a nice backdrop for macro supply in terms of limiting supply in the future.

What do you think the commodities/natural resources environment will look like in five to ten years?

With growing conversation around energy transition and electric vehicles, there is real fear that demand for oil has peaked and is declining. However, we think oil demand should continue to grow.

There are billions of people living in poverty, and I believe oil is needed to develop relevant economies. While the Western world, and China for that matter, is starting to embrace electric vehicles and energy transition, I think there is still a great demand for oil in the future.

Newton’s head of global equity research Brock Campbell discusses his route into asset management, his career at Newton and the market outlook.

Brock is head of global equity research at Newton. He provides leadership and managerial oversight of the research team and research process and works to develop the strategic direction of the research platform. Brock joined Newton in 2021 and BNY Mellon Investment Management in 2005.

Tell us about your background and what influenced you to choose a career in investment management.

Investment management certainly was not on my radar growing up in rural Maine. Coming out of college I had my sights on becoming a lawyer and was actually studying for the law school admission tests when I landed my first job at the Boston Company (the Boston Company was acquired by Mellon, which later merged with Newton). It was at the Boston Company where I developed a passion for markets and was instantly drawn to the investment team.

After working briefly in the marketing department, I became a research associate, supporting senior analysts in the cyclical investment space. I eventually moved into an analyst role and ultimately became a portfolio manager for global infrastructure in 2016. In 2022, I became head of global equity research at Newton and more recently, I became a portfolio manager on the Global Natural Resources strategy.

How would you characterize your style as a portfolio manager?

As an infrastructure portfolio manager, my role in natural resource investing has historically been providing demand-side input for commodities analysis. One of the things that I really love about my role is the ability to toggle across many sectors. There are many more narrowly defined sector funds in the market, and I believe that looking holistically at the entire natural resources space is a real differentiator.

How would you describe Newton’s team environment and collaborative approach?

It is a unique framework built on the premise of our multidimensional research platform. We embrace enriching the investment discussion through multiple lenses – sometimes an investment decision needs an additional viewpoint outside the traditional equity investor toolkit. For example, private market analysts imbedded on the research team can bring insights into the disruptive entrants outside of the public realm, or with credit research integration, the team has a more complete view of the capital structure. With a diverse set of resources, we believe the multidimensional research platform helps us to develop more holistic conclusions.

When evaluating a company, what metrics or qualities do you value the most?

Many companies are huge consumers of the commodities we are investing in, whether it be natural gas, copper or even uranium, and that demand-side analysis is a key input into our commodity outlook. When investing, I have a value bias and look for companies that have improving business fundamentals, attractive valuations and ideally a catalyst to crystalize the change in momentum. As an infrastructure portfolio manager, I believe it is critical to understand the regulatory construct and whether the framework allows for a fair return of and on capital invested.

What opportunities or themes are you most excited about in the natural resources space?

I think it is a very exciting time to invest in natural resources as it has seen an extended period of underinvestment. For example, looking at oil on the supply side, it is the lack of supply and funding that we believe points to potential value and opportunity within the sector. There is a huge supply-demand mismatch.

I also have conviction in copper over the medium term. While it may seem to be quite a boring metal in some ways, it is needed in every element of electrification, and its supply can be difficult to bring online.

What do you think the commodities/natural resources environment will look like in five to ten years?

I believe many of the commodities that we are investing in today are going to be critical as we transition to the future. Many people think of cobalt and lithium, but I believe uranium may be the commodity people are talking about for the next decade. Over the past 10 years, we have witnessed a complete 180-degree change of perception on nuclear energy, from a resource once viewed as being an environmental problem to one that many now view as a climate solution. This change in perception has been backed by supportive public policy, most notably measures in the US, due to the Inflation Reduction Act (IRA). I believe this transition may require an ‘all of the above’ strategy and see nuclear energy as part of the future solution.