MLP Strategy

(Master Limited Partnership)

A Potential Source for Growth and Income

Strategy Objective

Seeks to deliver total return, through a combination of offering a competitive current yield, while also providing the potential for capital appreciation.
 

Approach

Our three critical tenants of our MLP strategy:

  • Quality
  • Long-Term Growth
  • Current Yield

While current yield does provide a vital component of the total return proposition for investing in the MLP space, in our view, utilizing a balanced approach with opportunistic flexibility across these three critical tenants is critical to achieving superior capital appreciation and total return for long-term investors.

Our investment strategy typically focuses on companies that display many of the following characteristics:

  • High-quality companies that are likely to support above-average levels of distribution growth as well as a healthy balance sheet
  • Strategically located assets that have possess critical scale and/or scope of an asset network
  • High percentage of fee-based revenues and/or long duration “take-or-pay” contracts
  • Strong organic growth outlook with visible backlog of capital investment opportunities with attractive returns
  • Improving fundamentals, which we believe are currently underappreciated by the market
  • Attractive valuation relative to listed peer companies
  •  

Differentiating Characteristics

Integrated Energy Value Chain Research Platform

  • Comprised of specialized analysts that focus on those sectors/industries within the upstream, midstream, and downstream energy infrastructure space
  • Provides insights from supply & demand analysis on oil, natural gas and NGLs, as well as specific upstream and downstream factors and/or trends that may affect companies/industries within other segments along the energy value chain
  • Assists the team in formulating a broad perspective of the energy landscape in order to identify opportunities or pitfalls, ultimately providing a higher level of investment conviction

Balanced, Total Return Approach with Opportunistic Flexibility

  • While current yield is a vital component of the total return proposition for investing in MLPs, we believe that owning high-quality MLPs which exhibit above-average distribution growth is critical to achieving total return for long-term investors
  • Having the flexibility to rotate into and out of companies when we see opportunity is critical, as the MLP space continues to evolve

In-Depth Sector Specialization & Experience

  • The team’s experience in analyzing operational, financial, and regulatory factors within the broad infrastructure universe is bolstered by our company, industry, and country expertise
  • Investment professionals with a long history of investing in midstream infrastructure companies dating back to the late 1990’s and MLPs since 2006
  • Deep midstream expertise within the team is reinforced and enhanced by Jennison’s integrated energy value chain research platform, providing the upstream and downstream knowledge-base of Jennison’s specialized sector/industry analysts

Key Characteristics

Benchmark: Alerian MLP Index
Number of Holdings: Typically 30 – 50
Strategy Inception: December 2013
Market Cap: All-Cap
Turnover: 30 – 50% under normal market conditions

Investment Team

Our MLP team is a part of Jennison’s Income & Infrastructure investment suite which also includes our Global Infrastructure, Equity Income, Utility and Rising Dividend strategies. The MLP team is complemented by the sharing of intellectual capital and close interaction with our Natural Resources team and is supported across Jennison’s energy value chain research approach, which consists of specialized analysts that focus on those specific sectors/industries within the upstream, midstream, and downstream energy infrastructure space.

Jennison’s MLP strategy is a natural extension of our infrastructure expertise as members of the team have been investing in midstream infrastructure companies since the late 1990’s.

 

Meet the Team

Please remember that there are inherent risks involved with investing in the markets, and your investments may be worth more or less than your initial investment upon redemption. There is no guarantee that the investment managers’ objectives will be achieved. Professional money management is not suitable for all investors. The risks associated with investing include but are not limited to: derivative securities, which may carry market, credit, and liquidity risks; short sales, which involve costs and the risk of potentially unlimited losses; leveraging, which may magnify losses; high yield (“junk”) bonds, which are subject to greater market risks; small/mid cap stocks which may be subject to more erratic market movements than large cap stocks; foreign securities, which are subject to currency fluctuation and political uncertainty; real estate, which poses certain risks related to overall and specific economic conditions as well as risks related to individual property, credit and interest-rate fluctuations; and mortgage-backed securities, which are subject to prepayment and extension risks.

Thematic and concentrated portfolios may not be suitable for all investors. Such portfolios are non-diversified, so a loss resulting from a particular security will have greater impact on the portfolio’s return. Fixed income investments are subject to interest rate risk, and their value will decline as interest rates rise.

Your investment objectives, risk tolerance, and liquidity needs must be reviewed before suitable programs can be recommended. Asset allocation and diversification strategies do not assure a profit or protect against loss in declining markets. Investors should consult with their attorney, accountant, and/or tax professional for advice concerning their particular situation.

Additional considerations:
This web site is not intended as an offer or solicitation with respect to the purchase or sale of any security or other financial instrument or any investment management services.
The does not constitute investment advice and should not be used as the basis for any investment decision. There is no assurance that the strategy objectives as discussed will be met. Further, there is no assurance that any strategies, methods, sectors, or any investment programs herein were or will prove to be profitable, or that any investment recommendations or decisions we make in the future will be profitable for any investor or client.
These materials do not purport to provide any legal, tax or accounting advice.