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Natural Resource Partners LP Message Board

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  • jrad52 jrad52 Apr 29, 2008 2:09 PM Flag

    Debt....$500 Million +

    With very few exceptions (CPNO and LINE, maybe a few others), every publicly traded partnership has incentive distribution rights which give an increasing portion of total distributions to the GP. Almost all of them cap out at 50%. A few older ones (before the GPs realized what they could get away with) cap out at 25%. But the point is that NRP is the same as all the others.

    If this really bothers you, you can buy units in several publicly traded partnerships that are the GPs in other publicly traded partnerships, and you will get the benefit of the incentive distribution rights. Most of these GPs trade at lower yields than the LPs, but the distributions grow much faster. In the coal area, you can invest in PVG (the GP in PVR) or AHGP (The GP in ARLP).

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    • Thanks for the suggestions. I appreciate it.

      I do not beleive there is anything here to put a cap on 50% on these incentive distributions. And when I look at the flawed deals which resulted in these distributions I am quite angry at management for being so genererous with the incentive rights on top of overpaying for the flawed assets. This is all rather recent.

      One can call it incompetence...I suspect it is something quite different.

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