Infrastructure Capital Advisors Launches MLP ETF

Oct 6 2014 | 9:10am ET

New York-based Infrastructure Capital Advisors has launched an ETF offering exposure to one of the best-performing alternative strategies of the year, master limited partnerships.

Infrastructure Capital bills the InfraCap MLP ETF as the first actively managed ETF offering “pure” MLP exposure. The fund consists of high-quality, midstream energy MLPs and related general partners and expects to establish an initial annualized distribution yield of 8.0%. The fund seeks to achieve “capital appreciation, a high level of current income and steady growth in the income stream.”

The fund is managed by the firm's CEO, Jay D. Hatfield, who was a co-founder and general partner of an MLP, a hedge fund manager focused on the energy and utility sectors, and a Morgan Stanley utility and energy infrastructure investment banker.

MLPs were up 16.44% year to date as of end-September, according to Hedge Fund Research, while the average hedge fund was up 1.19%.

“We are pleased to introduce this innovative product in what we believe to be the early innings of the US energy infrastructure boom and to provide our investors with the benefit of active management and potentially superior returns” said Hatfield in a statement. “We believe that investing in companies with tangible assets that produce free cash flow creates stable, intrinsic value and is likely to produce reliable income to investors over time.”

Founded in 2012, Infrastructure Capital Advisors manages an actively managed ETF and a series of private investment partnerships.

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