Another month, another master limited partnership closed-end fund.
Closed-end funds welcomed their latest addition Tuesday, with the initial public offering of Tortoise MLP
The new issuance market for CEFs has been heating up in 2010, after two lackluster years. So far, we have seen 10 new CEFs, with aggregate net proceeds of $4.2 billion. However, it will be difficult to outpace the torrid IPO market of 2007, which successfully brought 41 deals to market and raised $26.5 billion in net proceeds (three of those funds have already been shuttered).
It was only one month ago that ClearBridge Energy MLP
Demand for MLP funds has been high recently, as their higher, tax-efficient distributions appeal to investors who are searching high and low for sources of sufficient income. In the month since the ClearBridge MLP launch, UBS has brought forth two MLP-focused exchange-traded notes (UBS E-TRACS Alerian Natural Gas MLP Index ETN
Let's take a closer look at Tortoise MLP.
Tortoise MLP plans to invest at least 80% of the total fund assets in a portfolio of energy infrastructure MLPs, with 70% of total assets invested specifically in natural gas infrastructure MLPs. We believe this fund is suitable for investors seeking exposure to the buildout of the U.S. natural gas infrastructure and for those seeking access to the strong cash-flow generation of MLPs.
Tortoise Capital Advisors is acting as the investment advisor. Tortoise has five other funds, including four CEFs and one business development company. Total assets managed in those five funds at the end of June were $3.6 billion. Tortoise MLP adds nearly a third more assets to the advisor's asset base. Tortoise also manages assets in accounts other than funds. It is one of the largest investors in U.S. energy infrastructure MLPs and, as such, is well-suited to make MLP investing decisions for you.
The portfolio will be managed by the same investment committee that oversees the other Tortoise funds. The committee is composed of David Schulte, Kevin Birzer, Zachary Hamel, Kenneth Malvey, and Terry Matlack. They are part of a 20-member investment team that looks exclusively at the energy sector. The firm is specialized, focused on the energy sector and MLPs in particular.