Liberty Cove Insights

Master Limited Partnerships—Insight Series 2020, No. 7

In this edition of our Master Limited Partnership Insight Series, we look at Exchange Traded Notes (ETNs) and some important considerations for investors who may be thinking about using them to access the MLP market.

Master Limited Partnerships - Insight Series No. 6, September 2020

In this paper, we examine the benefits of using an “all-MLP” approach when investing in midstream energy companies via mutual funds and ETFs, and we describe an innovative new approach designed to provide full, tax-efficient and low-cost MLP exposure.

Master Limited Partnerships—Insight Series No. 5, June 2020

Master Limited Partnerships (MLPs) can offer attractive yields versus many other income-oriented instruments such as REITs, Utility stocks, and Bonds. In this edition of Liberty Cove’s Insight Series, we explore MLP yield and the effect of various investment portfolio approaches on MLP yield.

Master Limited Partnerships—Insight Series No. 4, April 2020

A Closer Look at Oil Prices and MLPs. As carriers of “black gold”, along with other hydrocarbons, MLPs have an economic relationship with oil prices, though as others have noted1 a significant portion of MLP cash flow is fee-based income, operating their businesses in a “toll-road” fashion, and not directly connected to the price of oil.2 Certainly the price of oil plays a role in pipeline demand, but it can be a complicated relationship. With all eyes on oil prices today, we look at two dynamics in the relationship to help determine how oil and MLP prices might interact in the near term.

Master Limited Partnerships—Insight Series No. 3, March 2020

MLP Investing in the Downturn - “Q&A” With Dr. Brian Chen, Chief Investment Officer & Portfolio Manager, Liberty Cove Investors.

Master Limited Partnerships—Insight Series No. 2, 2020

Total Return Swaps: What Do Investors Need to Know? Ever since the 2007–2008 financial crisis, many investors have become wary of using derivative contracts of any kind. With Collateralized Debt Obligations (CDO’s) at the technical heart of the mortgage meltdown and subsequent financial panic, all but institutional investors have shied away from using these financial tools and have become skeptical of investment products that use them. This short piece provides some background on Total Return Swaps and how Liberty Cove Investors uses them to achieve the desired asset class exposures in our portfolios, without taking undue risk.

Master Limited Partnerships - Insight Series No. 1, January 2020

Master Limited Partnerships (MLPs) can be compelling investments, but investors in these securities face a daunting array of challenges, including complex tax reporting, unrelated business taxable income, under-exposure to the asset class, double taxation, and single-issuer principal counter-party credit risk. Direct investment in MLPs or in various MLP investment vehicles may solve one or more of these issues, but each comes with its own drawback or limitation.

News Items

Examining the Active vs. Passive Debate for Midstream

Advocates of passive investing argue that excess returns cannot be maintained over the long run and prefer a hands-off approach with lower fees. Today’s note examines the numerous factors relevant to this debate for midstream, including the characteristics of the products, applicable risk-return metrics, and the potential for closet indexing.


Revisiting MLP vs. C-Corp Taxation as Election Day Looms

Despite an ongoing debate about the structure of MLPs versus C-Corps, MLPs remain the most tax-efficient way to own midstream energy infrastructure assets. Even after the passage of tax reform in late 2017 that lowered the corporate tax rate, MLPs maintain a noticeable tax advantage over corporations.

Is Oil & Gas Refining & Marketing MLP Industry Turning the Corner?

Master limited partnerships (or MLPs) differ from regular stocks in that interests in them are referred to as units and unitholders (not shareholders) are partners in the business. Importantly, these hybrid entities bring together the tax benefits of a limited partnership with the liquidity of publicly traded securities.

Decisions, Decisions: Demystifying MLP Investment Options

With interest rates near historic lows and energy equities also depressed after oil’s rout, financial advisors and investors looking for income and value may be taking a fresh look at the MLP and energy infrastructure space.

Seeking Alpha - Q And A With an MLP Expert

Hinds Howard's interview with Will Hershey, an expert in the structuring of MLP-related ETFs.

Midstream Dividend Update: More Maintaining Than Cutting

The majority of constituents (by weighting) in both the Alerian MLP Infrastructure Index (AMZI) and the Alerian Midstream Energy Select Index (AMEI) are maintaining their dividends sequentially, with a few names even growing.

As Russia and Saudi Arabia Retreat, U.S. Oil Industry Avoids the Worst...Job losses and bankruptcies appear certain, but a deal among producers may put a floor under prices for now. The American oil industry may have dodged a bullet
MLP Dividends are Starting to Get Cut - Stacey Morris, director of research at Alerian, has published reports arguing that the companies are in better shape than these prices indicate.
Midstream Updates Point to More Stability Than Price Action Implies - With the oil price landscape having changed dramatically, midstream investors are anxiously awaiting updated company outlooks, even if it is reaffirming past guidance.


The Energy Infrastructure Council, (EIC), a non-profit trade association.
Energy Information Administration