MLP Funds
Master Limited Partnership (MLP) or Publicly Traded Partnership (PTP) is a unique investment vehicle in the alternative investment space. Major institutions in the last few years have developed new mutual funds to satisfy the investment needs.
The Coalition of Publicly Traded Partnerships (http://www.ptpcoalition.org/) is the main sources for information about the partnerships. This coalition will change its name to National Association of Publicly Traded Partnerships (NAPTP). They will develop a new web site (http://www.naptp.org/) to distribute similar information.
I believe this asset class will become as popular as the REIT (Real Estate Investment Trust). Like REIT, PTP has to distribute majority portion of its earnings to investors. So these partnerships can avoid the double tax status of regular corporations. Most of the current partnerships are energy-related.
Another asset class similar to MLP is the Royalty Trust. There are Canadian Royalty Trusts. There are American royalty trusts. However, there is only one fund listed in this article has significant holdings in royalty trusts. I believe Energy Royalty Trust has a unique space in the investment space.
The following MLP funds are the investment universe I can find from various sources for now. This is one of the newest asset classes to be added to sophisticated investment portfolios. The following mutual funds are listed according to their inception dates. Most of the information is extracted from Closed-End Fund Association.
Tortoise Energy Infrastructure Corporation (TYG)
Inception Date: 2/27/2004
Total Net Assets: $667,077,000
Total Common Assets: $432,077,000
This is a leveraged closed-end mutual fund. The Fund's goal is to provide our stockholders with a high level of total return with an emphasis on dividends. The Fund attempts to do this by owning a strategic portfolio of assets in the energy infrastructure sector primarily pipeline and processing operations. The investments are in the form of limited partnerships interests in Master Limited Partnerships (MLPs). Energy infrastructure MLPs are engaged in the transportation storage and processing of hydrocarbon natural resources from production points to the end users. The Fund's investments are primarily in midstream pipeline and processing operations which produce steady streams of cash flows with less exposure to commodity prices than many alternative investments in the broader energy industry.
First Trust Energy Income & Growth Fund (FEN)
Inception Date: 6/24/2004
Total Net Assets: $211,787,000
Total Common Assets: $152,787,000
This is a leveraged closed-end mutual fund. The Fund's investment objective is to seek a high level of after-tax total return with an emphasis on current distributions paid to shareholders. The Fund seeks to provide its shareholders with an efficient vehicle to invest in a portfolio of cash-generating securities of energy companies. The Fund will focus on investing in publicly traded master limited partnerships ("MLPs") and related public entities in the energy sector which the Fund's sub-adviser believes offer opportunities for income and growth. Under normal market conditions after the invest-up period, the Fund will invest at least 85% of its managed assets (including assets obtained through leverage) in securities of energy companies and energy sector MLPs and MLP-related entities and will invest at least 65% of its managed assets in equity securities of such MLPs and MLP-related entities.
Kayne Anderson MLP Investment Company (KYN)
Inception Date: 9/27/2004
Total Net Assets: $1,391,720,000
Total Common Assets: $996,720,000
The Fund's investment objective is to obtain a high after-tax total return by investing at least 85% of our total assets in MLPs and other Midstream Energy Companies. MLPs refer to energy-related master limited partnerships and their affiliates.
Fiduciary/Claymore MLP Opportunity Fund (FMO)
Inception Date: 12/23/2004
Total Net Assets: $523,261,000
Total Common Assets: $373,261,000
This is a leveraged closed-end mutual fund. The Fund's investment objective is to provide a high level of after-tax total return with an emphasis on current distributions paid to shareholders. The Fund has been structured to seek to provide an efficient vehicle through which its shareholders may invest in a portfolio of publicly traded securities of master limited partnerships ("MLPs") and MLP Affiliates. The Fund anticipates that a substantial portion of the MLP entities in which the Fund invests will be engaged primarily in the energy natural resources and real estate sectors of the economy. The Fund may also invest in common stock of large capitalization companies including companies engaged primarily in such sectors.
BlackRock Global Energy & Resources Trust (BGR)
Inception Date: 12/29/2004
Total Net Assets: $945,655,000
This is a non-leveraged closed-end mutual fund. The Trust seeks to provide total return through a combination of current income and capital appreciation by investing primarily in equity securities of companies engaged in the energy and natural resources business and equity derivatives with exposure to the energy and natural resources industry. These equity securities may include common stocks preferred shares convertible securities warrants depository receipts equity interests in Canadian Royalty Trusts and MLPs. The Trust will not invest more than 25% of the value of its total assets in MLPs. The Trust expects to invest primarily in companies located in developed countries but may invest in companies located in emerging markets. The Trust may invest in companies of any size market-capitalization including small capitalization and mid-capitalization companies.
Tortoise Energy Capital Corporation (TYY)
Inception Date: 5/31/2005
Total Net Assets: $579,305,000
Total Common Assets: $389,305,000
This is a leveraged closed-end mutual fund. Its investment objective is to obtain a high level of total return with an emphasis on current distributions paid to stockholders. The Company will seek to provide its stockholders with an efficient vehicle to invest in a portfolio consisting primarily of MLPs and their affiliates in the energy infrastructure sector. Under normal circumstances and once fully invested in accordance with its investment objective the Company will have at least 80% of its net assets plus any borrowings for investment purposes invested in equity securities of entities in the energy sector and at least 80% of its total assets invested in equity securities of MLPs and their affiliates in the energy infrastructure sector.
Kayne Anderson Energy Total Return Fund (KYE)
Inception Date: 6/27/2005
Total Net Assets: $1,117,300,000
Total Common Assets: $817,300,000
This is a leveraged closed-end mutual fund. The Fund's investment objective is to obtain a high total return with an emphasis on current income. Under normal market conditions we will invest at least 80% of the aggregate of our net assets and borrowings (our "total assets") in securities of Energy Companies. We will invest in equity securities such as common stocks preferred stocks convertible securities warrants depository receipts and equity interests in MLPs MLP affiliates royalty trusts and other Energy Companies.
Tortoise North American Energy Corporation (TYN)
Inception Date: 10/31/2005
Total Net Assets: $157,333,000
Total Common Assets: $117,333,000
This is a leveraged closed-end mutual fund. The Company seeks to provide a high level of total return with an emphasis on tax-advantaged dividend income paid to shareholders by investing in a portfolio consisting primarily of publicly traded Canadian royalty trusts and royalty income trusts (collectively "RITs") and publicly traded United States master limited partnerships ("MLPs") with an emphasis on the midstream and downstream North American energy industry. Under normal conditions the Company will invest at least 80% of its total assets in equity securities of companies in the energy industry with their primary operations in North America ("Energy Companies"). The Company will invest at least 50% of its total assets in RITs will not invest more than 25% of its total assets in equity securities of MLPs and may invest up to 30% of its total assets in restricted securities.
Kayne Anderson Energy Development Company (KED)
Inception Date: 9/21/2006
Total Net Assets: $250,000,000
KED is a BDC (business development company) which invests in private (non-public) companies. Kayne Anderson Energy Development Company is a newly organized investment company incorporated under the laws of the State of Maryland to invest primarily in Energy Companies that are not traded publicly.
Its investment objective is to generate both current income and capital appreciation primarily through equity and debt investments. We seek to achieve this objective by investing at least 80% of our net assets together with the proceeds of any borrowings (our “total assets”) in securities of companies that derive the majority of their revenue from activities in the energy industry, including:
Midstream Energy Companies, which are businesses that operate assets used to gather, transport, process, treat, terminal and store natural gas, natural gas liquids, propane, crude oil or refined petroleum products;
Upstream Energy Companies, which are businesses engaged in the exploration, extraction and production of natural resources, including natural gas, natural gas liquids and crude oil, from onshore and offshore geological reservoirs; and
Other Energy Companies, which are businesses engaged in owning, leasing, managing, producing, processing and sale of coal and coal reserves; the marine transportation of crude oil, refined petroleum products, liquefied natural gas (“LNG”), as well as other energy-related natural resources using tank vessels and bulk carriers; and refining, marketing and distributing refined energy products, such as motor gasoline and propane to retail customers and industrial end-users. Midstream, Upstream and Other Energy Companies are collectively referred to herein as “Energy Companies.”
Its common stock is traded on the New York Stock Exchange under the symbol "KED." They are headquartered in Houston, Texas.
The Coalition of Publicly Traded Partnerships (http://www.ptpcoalition.org/) is the main sources for information about the partnerships. This coalition will change its name to National Association of Publicly Traded Partnerships (NAPTP). They will develop a new web site (http://www.naptp.org/) to distribute similar information.
I believe this asset class will become as popular as the REIT (Real Estate Investment Trust). Like REIT, PTP has to distribute majority portion of its earnings to investors. So these partnerships can avoid the double tax status of regular corporations. Most of the current partnerships are energy-related.
Another asset class similar to MLP is the Royalty Trust. There are Canadian Royalty Trusts. There are American royalty trusts. However, there is only one fund listed in this article has significant holdings in royalty trusts. I believe Energy Royalty Trust has a unique space in the investment space.
The following MLP funds are the investment universe I can find from various sources for now. This is one of the newest asset classes to be added to sophisticated investment portfolios. The following mutual funds are listed according to their inception dates. Most of the information is extracted from Closed-End Fund Association.
Tortoise Energy Infrastructure Corporation (TYG)
Inception Date: 2/27/2004
Total Net Assets: $667,077,000
Total Common Assets: $432,077,000
This is a leveraged closed-end mutual fund. The Fund's goal is to provide our stockholders with a high level of total return with an emphasis on dividends. The Fund attempts to do this by owning a strategic portfolio of assets in the energy infrastructure sector primarily pipeline and processing operations. The investments are in the form of limited partnerships interests in Master Limited Partnerships (MLPs). Energy infrastructure MLPs are engaged in the transportation storage and processing of hydrocarbon natural resources from production points to the end users. The Fund's investments are primarily in midstream pipeline and processing operations which produce steady streams of cash flows with less exposure to commodity prices than many alternative investments in the broader energy industry.
First Trust Energy Income & Growth Fund (FEN)
Inception Date: 6/24/2004
Total Net Assets: $211,787,000
Total Common Assets: $152,787,000
This is a leveraged closed-end mutual fund. The Fund's investment objective is to seek a high level of after-tax total return with an emphasis on current distributions paid to shareholders. The Fund seeks to provide its shareholders with an efficient vehicle to invest in a portfolio of cash-generating securities of energy companies. The Fund will focus on investing in publicly traded master limited partnerships ("MLPs") and related public entities in the energy sector which the Fund's sub-adviser believes offer opportunities for income and growth. Under normal market conditions after the invest-up period, the Fund will invest at least 85% of its managed assets (including assets obtained through leverage) in securities of energy companies and energy sector MLPs and MLP-related entities and will invest at least 65% of its managed assets in equity securities of such MLPs and MLP-related entities.
Kayne Anderson MLP Investment Company (KYN)
Inception Date: 9/27/2004
Total Net Assets: $1,391,720,000
Total Common Assets: $996,720,000
The Fund's investment objective is to obtain a high after-tax total return by investing at least 85% of our total assets in MLPs and other Midstream Energy Companies. MLPs refer to energy-related master limited partnerships and their affiliates.
Fiduciary/Claymore MLP Opportunity Fund (FMO)
Inception Date: 12/23/2004
Total Net Assets: $523,261,000
Total Common Assets: $373,261,000
This is a leveraged closed-end mutual fund. The Fund's investment objective is to provide a high level of after-tax total return with an emphasis on current distributions paid to shareholders. The Fund has been structured to seek to provide an efficient vehicle through which its shareholders may invest in a portfolio of publicly traded securities of master limited partnerships ("MLPs") and MLP Affiliates. The Fund anticipates that a substantial portion of the MLP entities in which the Fund invests will be engaged primarily in the energy natural resources and real estate sectors of the economy. The Fund may also invest in common stock of large capitalization companies including companies engaged primarily in such sectors.
BlackRock Global Energy & Resources Trust (BGR)
Inception Date: 12/29/2004
Total Net Assets: $945,655,000
This is a non-leveraged closed-end mutual fund. The Trust seeks to provide total return through a combination of current income and capital appreciation by investing primarily in equity securities of companies engaged in the energy and natural resources business and equity derivatives with exposure to the energy and natural resources industry. These equity securities may include common stocks preferred shares convertible securities warrants depository receipts equity interests in Canadian Royalty Trusts and MLPs. The Trust will not invest more than 25% of the value of its total assets in MLPs. The Trust expects to invest primarily in companies located in developed countries but may invest in companies located in emerging markets. The Trust may invest in companies of any size market-capitalization including small capitalization and mid-capitalization companies.
Tortoise Energy Capital Corporation (TYY)
Inception Date: 5/31/2005
Total Net Assets: $579,305,000
Total Common Assets: $389,305,000
This is a leveraged closed-end mutual fund. Its investment objective is to obtain a high level of total return with an emphasis on current distributions paid to stockholders. The Company will seek to provide its stockholders with an efficient vehicle to invest in a portfolio consisting primarily of MLPs and their affiliates in the energy infrastructure sector. Under normal circumstances and once fully invested in accordance with its investment objective the Company will have at least 80% of its net assets plus any borrowings for investment purposes invested in equity securities of entities in the energy sector and at least 80% of its total assets invested in equity securities of MLPs and their affiliates in the energy infrastructure sector.
Kayne Anderson Energy Total Return Fund (KYE)
Inception Date: 6/27/2005
Total Net Assets: $1,117,300,000
Total Common Assets: $817,300,000
This is a leveraged closed-end mutual fund. The Fund's investment objective is to obtain a high total return with an emphasis on current income. Under normal market conditions we will invest at least 80% of the aggregate of our net assets and borrowings (our "total assets") in securities of Energy Companies. We will invest in equity securities such as common stocks preferred stocks convertible securities warrants depository receipts and equity interests in MLPs MLP affiliates royalty trusts and other Energy Companies.
Tortoise North American Energy Corporation (TYN)
Inception Date: 10/31/2005
Total Net Assets: $157,333,000
Total Common Assets: $117,333,000
This is a leveraged closed-end mutual fund. The Company seeks to provide a high level of total return with an emphasis on tax-advantaged dividend income paid to shareholders by investing in a portfolio consisting primarily of publicly traded Canadian royalty trusts and royalty income trusts (collectively "RITs") and publicly traded United States master limited partnerships ("MLPs") with an emphasis on the midstream and downstream North American energy industry. Under normal conditions the Company will invest at least 80% of its total assets in equity securities of companies in the energy industry with their primary operations in North America ("Energy Companies"). The Company will invest at least 50% of its total assets in RITs will not invest more than 25% of its total assets in equity securities of MLPs and may invest up to 30% of its total assets in restricted securities.
Kayne Anderson Energy Development Company (KED)
Inception Date: 9/21/2006
Total Net Assets: $250,000,000
KED is a BDC (business development company) which invests in private (non-public) companies. Kayne Anderson Energy Development Company is a newly organized investment company incorporated under the laws of the State of Maryland to invest primarily in Energy Companies that are not traded publicly.
Its investment objective is to generate both current income and capital appreciation primarily through equity and debt investments. We seek to achieve this objective by investing at least 80% of our net assets together with the proceeds of any borrowings (our “total assets”) in securities of companies that derive the majority of their revenue from activities in the energy industry, including:
Midstream Energy Companies, which are businesses that operate assets used to gather, transport, process, treat, terminal and store natural gas, natural gas liquids, propane, crude oil or refined petroleum products;
Upstream Energy Companies, which are businesses engaged in the exploration, extraction and production of natural resources, including natural gas, natural gas liquids and crude oil, from onshore and offshore geological reservoirs; and
Other Energy Companies, which are businesses engaged in owning, leasing, managing, producing, processing and sale of coal and coal reserves; the marine transportation of crude oil, refined petroleum products, liquefied natural gas (“LNG”), as well as other energy-related natural resources using tank vessels and bulk carriers; and refining, marketing and distributing refined energy products, such as motor gasoline and propane to retail customers and industrial end-users. Midstream, Upstream and Other Energy Companies are collectively referred to herein as “Energy Companies.”
Its common stock is traded on the New York Stock Exchange under the symbol "KED." They are headquartered in Houston, Texas.
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