Master Limited Partnership (MLP) – Limited Partnership firm in United States that is publicly traded in Stock Markets providing tax benefits to small investors.
MLP is a limited partnership that generates more than 90% of its revenues from the qualifying sources as determined by Internal Revenue Service under section 7704 (d)(1)(e) in United States. The qualifying sources are activities like transportation of oil, natural gas, coal, real property rents.
Partnership by individual with MLP can start with a low stake of about 2% as well. They earn income and get paid quarterly by way of increase in share of partnership. MLPs act as pass through entities and are not taxed, and the individual partners are allowed to take benefit of pro rata share of depreciation in their individual firm to reduce tax liability. MLPs on the other hand give relatively cheap funding.
The Fund Manager – Jay D. Hatfield – Having extensive experience in advising and investing in energy infrastructure companies in United States.
Mr. Hatfield an MBA from Wharton School and a BS from the University of California started his career as a CPA at Ernst & Young. Thereafter Investment Banker at Morgan Stanley &Co in field of Energy and Utility Sector and thereafter Hedge Fund Manager as well as co-founder and general partner at NYSE Listed MLP – NGL Energy Partners, LP. He is the President and co -founder of ICA. With experience in various posts and sectors enables him to provide the best services as fund manager.
MLP Investing – Benefits associated with long term investments in MLP‘s.
Investments in MLP generate most stable cash flows in the long term taking into account the high operating leverage and high financial leverage. MLP’s have low cost of capital in account of absence of taxes and yield higher returns. MLP investments also have many disadvantages as well. MLP unit holders are personally liable to taxes for their share of partnership in the MLP. There is small pool of potential investors as compared to investment in equities by various fund houses.
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