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OppenheimerFunds Acquires MLP Investment Manager
OppenheimerFunds has agreed to purchase SteelPath Capital Management and SteelPath Fund Advisors, an energy infrastructure investments firm focused on the Master Limited Partnership sector.
The transaction - the financial terms of which remain undisclosed - is expected to close during the fourth quarter of this year, subject to certain conditions and approvals.
Dallas, TX-headquartered SteelPath offers a range of MLP-focused mutual funds and privately-available products. “SteelPath’s expertise in the MLP sector will be a key addition to our alternatives platform, complementing our real estate, commodities and precious metals product lineup,” said Bill Glavin, OppenheimerFunds chief executive.
Meanwhile, SteelPath will benefit from the “broader and deeper exposure” of the Oppenheimer distribution relationships, while its investment team concentrates on energy infrastructure investment, added Gabriel Hammond, SteelPath founder and CEO.
Master Limited Partnerships
An MLP combines the tax benefits of a limited partnership with the liquidity of a publicly-traded company. The firm says this structure has evolved to become the dominant form of organization used by energy infrastructure operators - similar to how real estate investment migrated to the Real Estate Investment Trust structure.
“Importantly, the expected volume growth in domestically-produced crude oil, natural gas, and natural gas liquids over the coming decade should provide robust growth opportunities for energy infrastructure providers,” the firm said.
However, investments in securities of MLPs involve risks that differ from investment in common stock, such as cash flow risks, tax risks and deferred tax risks. “Investments concentrated in one economic sector, such as energy, experience greater volatility than more broadly-based investments,” the firm said.
As of June 30, OppenheimerFunds, with its subsidiaries, managed over $176 billion in assets.
SteelPath has some $2.6 billion in assets under management, as of June 30. The firm has a seven-year track record in MLP investing.