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Texas Pacific Land Corporation: The Riches of Royalties
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Texas Pacific Land Corporation: The Riches of Royalties

An Interview with Chadd Garcia of Ave Maria Mutual Funds

Welcome to Episode 19 of the Preferred Shares Podcast.

We interviewed a special guest, Chadd Garcia, about Texas Pacific Land Corporation (TPL). Chadd is a veteran investment analyst, has worked in private equity, and is currently Vice President & Portfolio Manager at Ave Maria Mutual Funds.


In This Episode

Here are some highlights from the podcast episode about Texas Pacific Land Corporation (TPL), with the timestamps you requested:

  • [1:52] – Chadd explains how he became interested in TPL.

  • [2:53] – TPL’s early history

  • [4:48] – Oil was discovered in West Texas in the 1920s, but fracking in the 2010s significantly increased the value of the land.

  • [6:17] – TPL’s decision to get in the water business to support fracking.

  • [11:12] – TPL’s unique shareholder base, comprised of long-term investors and Texas families.

  • [14:11] – The reasons for internally handling the water business.

  • [16:54] – The best way to assess TPL’s valuation, considering its unique advantages and potential call options.

  • [18:07] – Discussion about the potential of data centers in the Permian Basin.

  • [23:00] – Chadd shares his view that management would be better off allocating capital to share repurchases.

  • [31:04] – Chadd is generally not a fan of TPL acquiring royalties.

  • [36:14] – Discussion of how and why TPL recently became a corporation after being a trust for over 130 years.

  • [38:09] – Chadd shares some concerns with management’s compensation structure.

  • [40:22] – Appropriate incentive schemes for royalty companies.

1873 map showing the lines and lands of the Texas and Pacific Railway
1903 Poor’s Manual entry for TPL
The New York Times, December 16, 1926
The New York Times, June 8, 1927
30-year total returns of TPL vs. SPY
TPL February 2025 investor presentation

Additional Reading & Listening

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Disclaimer

All opinions expressed by Preferred Shares hosts and guests are solely their own opinions and do not reflect the opinions of their respective employers. This podcast is for informational and entertainment purposes only and should not be relied upon as a basis for investment decisions. None of the information contained in the podcast or this web site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person.

Clients of Andvari and Fortune Financial may maintain positions in the securities discussed in this podcast. Furthermore, from time to time, the Hosts may hold positions or other interests in securities mentioned in the Podcast and may trade for their own accounts based on the information presented. The Hosts may also take positions inconsistent with the views expressed in its messages on the Podcast.

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