Harrington Cooper has been appointed by Credit Suisse to manage the UK and Channel Islands distribution of its Master Limited Partnership (MLP) Index Fund.
The fund, which invests in the US energy infrastructure sector, is the first of its kind to be distributed in the UK having previously been confined to the US.
MLPs are publicly traded on US securities exchanges. They combine the tax benefits of a limited partnership with the liquidity of publicly traded securities. To qualify for MLP status the partnership must generate at least 90 per cent of its income from midstream activities related to the production, processing or transportation of oil, natural gas and coal. Instead of shares, MLP interests are denominated in units, and instead of dividends, investors receive quarterly distributions.
MLPs own real assets therefore benefiting from a rising value over time without the risks associated with commodities. The fund can be used as an effective hedge against inflation as businesses that MLPs traditionally invest in will normally include “inflation-plus” pricing, meaning that MLPs can offer rises faster than inflation.
Credit Suisse has partnered with Cushing MLP Asset Management for the fund. The fund’s performance and distributions are linked to the Cushing MLP Market Cap Index, which currently yields 5.6 per cent and is UCITS compliant.
Harry Dickinson, partner, Harrington Cooper, says: “The UK market is in a good position to embrace MLPs due to the highly attractive yield and capital growth that they can offer investment portfolios which are, at present, struggling to find both quality income and secular growth themes.
“The Credit Suisse MLP Index Fund provides investors with access to the US shale gas revolution via exceptional high-yielding infrastructure assets, fundamental to the continued growth of the US oil and gas sector.”