Legg Mason Preps Energy IPO

Chidem Kurdas

Master limited partnerships in energy are attracting managers, among them Legg Mason, which expects to launch a specialized energy fund this month. The vehicle is to trade on NYSE and invest most of its assets in energy sector limited partnerships.

Investors may like this format in part because of  tax advantages. Another advantage is the liquidity of publicly traded MLPs, although some investments take the form of direct placements. There are a variety of MLP businesses to choose from—oil and gas explorers, pipeline operators, processors, shippers, propane distributors and coal producers.

The Legg Mason unit responsible for the new fund is ClearBridge, an equity shop with $7.4 billion in energy-related investments out of total assets of $54.4 billion as of the end of March. The senior portfolio manager is Richard Freeman, who came to Legg Mason in 2005 from Citigroup via an acquisition.

Underwriters for the Legg Mason offering include Citigroup, Morgan Stanley, BofA Merrill Lynch, Janney Montgomery Scott, Maxim Group, RBC Capital Markets, Oppenheimer & Co., and others.

Another energy offering is a series of mutual funds from a team led by Gabriel Hammond, a former Goldman Sachs energy analyst who advised the bank on its multi-billion dollar portfolio of MLPs.

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3 Responses to “Legg Mason Preps Energy IPO”

  1. Ladenburg Thalmann Real Estate Hybrid « HedgeFundSmarts Says:

    […] The fund is also to invest in energy master limited partnerships. Ladenburg Thalmann investment bank does deals involving MLPs and was the book runner for an offering by Cushing MLP Total Return Fund this month. Natural resource MLPs have emerged as popular investments—Legg Mason, for instance, is preparing a fund to invest in them. […]

  2. Energy Partnerships’ Record Capital Raising « HedgeFundSmarts Says:

    […] So far high prices have not discouraged new investment vehicles that specialize in the partnerships-—among new MLP fund offerings is one from Legg Mason. […]

  3. Energy as Coupon « HedgeFundSmarts Says:

    […] not discouraged new investment vehicles that specialize in the partnerships. Mutual fund company Legg Mason started an MLP fund last year.  The fund now has $794 million in […]

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