Hedgies’ Energy MLP Strategies Vary

Chidem Kurdas

Some hedge funds invest directly in energy master limited partnerships. For instance, MLP specialist Swank Capital manages such hedge funds. Other managers prefer to invest indirectly, not having MLP expertise.

Jerry Swank, managing partner at Swank Capital and Cushing MLP Asset Management, says MLPs have been the top asset class for several years.

MLPs – which own and operate energy infrastructure – generate stable, non-cyclical  revenue, he said at a conference. Total market capitalization is at $285 billion; he expects it will reach half a trillion in two to three years.

Despite being in the energy business, MLPs have very little exposure to commodities. They’re seen as a way to get higher return without commodity market volatility. Managers often want to be in the asset class without having to build a specialized team.

Mr. Swank runs various investment vehicles, including Cushing MLP Total Return Fund. Hedge fund manager AQR invested in Cushing MLP. Other hedge funds have put money into Legg Mason’s ClearBridge Energy MLP Fund.

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One Response to “Hedgies’ Energy MLP Strategies Vary”

  1. Aimie Says:

    Aimie…

    […]Hedgies’ Energy MLP Strategies Vary « HedgeFundSmarts[…]…

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