Invesco US has launched the Invesco MLP Fund, an open-end, actively managed alternative fund that uses a top-down and bottom-up investment process.
The fund seeks to provide capital appreciation and secondarily income.
"The Invesco MLP Fund will complement our existing leading investment capabilities in real estate and infrastructure which, among other offerings in our broad product range, are important components of a diversified portfolio," says Joe Rodriguez, lead portfolio manager for Invesco MLP Fund and head of global securities for Invesco Real Estate, which oversees approximately USD61.5 billion in real assets. "Our investment philosophy is based on two core principles: we strive to maximise predictability and consistency of investment returns and seek to minimise risk through strict attention to portfolio design."
Focusing on long-term assets and using the same valuation techniques used with real estate, the team will be looking to identify publicly traded equity securities of MLPs operating in the most attractive and diverse hydrocarbon basins in the US, with higher quality assets, strong management teams with aligned interests and sound balance sheets that reflect stable cash flows. While the team will begin with an investible universe of approximately 130 MLP companies, it will filter for those that meet their defined target liquidity, risk and diversification profile.
"We've seen a meaningful uptick in US crude oil and natural gas production as a result of well-known technological advances in the extraction of these hydrocarbons," says Rodriguez. "Given this new energy boom, significant infrastructure investments are needed to support the movement and refinement of oil and gas from its extraction point to the end user. As a result, the number of available MLP investments has grown significantly, doubling in just seven years."
The management team began its expansion beyond managing real estate specific mutual funds earlier in 2014 with the launch of the Invesco Global Infrastructure Fund, which can invest up to 20 per cent in MLPs, using the same focus on using local market expertise to evaluate potential investments with stable cash flows derived from tangible long-lived assets.
"With our 20 offices around the world and 236 dedicated investment research professionals focused on understanding local economic drivers and future supply/demand trends, we believe Invesco Real Estate is uniquely positioned to perform the type of robust fundamental research needed to identify and underwrite infrastructure investments," says Rodriguez. "Our Invesco Real Estate headquarters in Dallas, TX, is particularly beneficial for midstream infrastructure MLP investing given a vast majority of those companies are also headquartered in Texas."