Review of Oil & Gas Portfolio Managers Yields High Returns: Brian Kessens Sees Double-Digit Appreciation for North American MLPs

Wall Street Transcript

67 WALL STREET, New York - November 26, 2012 - The Wall Street Transcript has just published its Oil and Gas Investing Forecast Report offering a timely review of the sector to serious investors and industry executives. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Oil & Gas Investing

Companies include: Williams Partners, Enterprise Products Partners, Kinder Morgan Energy Partners and many more.

In the following excerpt from the Oil and Gas Investing Forecast Report, an experienced portfolio manager discusses the outlook for the MLP sector for investors:

TWST: What makes MLPs so attractive right now?

Mr. Kessens: In our view, MLPs generate sustainable fee-based revenues with attractive growth prospects and controlled risk. We believe this sector will continue to deliver a current yield of approximately 6% with additional upside in the form of distribution growth and price appreciation of 6% to 8% for a total return in the low to mid teens. Because of the relatively stable fee-based nature of MLPs cash flows, the relative inelasticity of demand for the services and the critical nature of the assets they operate, we think MLPs offer a compelling total return opportunity with less risks relative to other industries, and this is evidenced by the fact that MLPs have historically generated substantially higher Sharpe ratios than the broader equity market and other yield oriented equities like REITs and utilities.

TWST: Does the general investor understand MLPs?

Mr. Kessens: Ten years ago no one knew what an MLP was. As the sector has grown to nearly 100 companies today, so has the level of knowledge about MLPs and the attendance at the various MLP conferences throughout the year. However, I still think that MLPs have a long way to go before they become what would be labeled a mainstream investment, equally understood by everyone.

TWST: What are some of the larger trends that you see that are driving the space right now?

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

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