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Master Limited Partnership

The Publicly Traded Master Limited Partnership ("MLP") Investment Case

As of March 31, 2018, there are 102 publicly traded energy MLPs having an aggregate market capitalization of $372 billion.

MLPs provide high distribution yields that grow annually. As of March 31, 2018, our MLP portfolios yielded 6.9% and have expected annual distribution growth of 15.9% over the next three years.

As of March 31, 2018, MLPs traded at attractive distribution yields compared to existing alternatives:

  • NBW Capital MLP Portfolio*: 6.9%
  • Ten year U.S. Treasury note: 2.7%
  • Barclays Aggregate Bond Index yield: 3.1%
  • S&P 500 Utility yield: 3.7%
  • REIT yields: 4.1%

MLPs trade at inexpensive valuations relative to their ten year norms. Spreads versus ten year U.S. Treasuries are 6.1% versus their 3.5% long-term average.

Midstream MLPs have more predictable revenue streams because of long term contracts and other fee based services. Midstream MLPs are less sensitive to commodity price volatility than other "energy and natural resource related equities."

MLPs organic growth will drive more than $300 billion of new energy infrastructure capital expenditures over the next decade.

The MLP business model allows for above average cash distributions, above average cash yields, and growth of future distributions, all of which provide an environment for price appreciation and outstanding total returns for investors.

MLPs offer significant tax advantages for taxable investors including deferral of most taxes until the time of sale.

Why utilize NBW Capital for MLPs?

  • NBW Capital has been actively managing MLP portfolios since 1991.
  • NBW Capital's record was achieved in actual portfolios and not "simulated" from a model.
  • NBW Capital's record is over ten years in duration.
  • NBW Capital has achieved these superior returns through the use of a repeatable investment process that focuses on the following attributes:

    • management integrity and quality,
    • business strategy and the likelihood of its successful execution,
    • financing capability (balance sheet quality), and
    • prospective distribution growth.

  • NBW Capital's fees are competitive versus our peers.
  • NBW Capital is long only and employs no leverage.
  • NBW Capital invests exclusively in publicly tradable securities.
  • NBW Capital is employee owned.

*NBW Capital claims compliance with the Global Investment Performance Standards (GIPS®). Information provided in the above chart is supplemental to the NBW Capital Master Limited Partnership (“MLP”) Composite Annual Disclosure Presentation which is provided below. All investment performance data is stated as Total Return. All returns for periods greater than one year are annualized. Past performance is not indicative of future results.

NBW Capital Master Limited Partnership Disclosure