The Master Limited Partnership (MLP) has two key components.  At the core of the MLP is the General Partner (GP), which actually runs daily operations (e.g., physical management of a pipeline, billing, accounting, etc.)  Limited Partners (LPs), on the other hand, are passive investors in the business and have no part in daily operations.  The [...]

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Standard & Poors has a pretty good article on its website outlining the basics of MLPs. Of particular interest is the low correlation of MLP returns with those of stocks and bonds.  For those not familiar with asset allocation theory, combining investment classes that have low correlations with each other is a good way to [...]

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MLPs have several advantages that make them appealing investments.  One key advantage is the absence of double taxation when it comes to paying dividends to investors.  Common stockholders, for example, are essentially taxed twice on company earnings: once at the corporate level (the company itself has to pay taxes to the US government on earnings) [...]

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Many investors assume, incorrectly, that fluctuations in oil & gas prices can significantly impact MLP unit prices.  However, the truth is that revenue from MLP assets (the majority of which are pipelines) is generated from a “toll road” model.  That is, it doesn’t matter how expensive the commodity shipped is – it only matters how [...]

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It’s been a rough year for the markets,  as major equity indexes suffered significant losses in the wake of subprime lending, rising inflation, and slowing economic growth.  So it’s no surprise that publicly traded MLPs have also had their share of bad luck lately.  However, as with any investment, there is risk involved.  SemGroup Energy [...]

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