MLPs, A Pipeline of Opportunities
April 2017    by George Rubis
The "great" energy recession of 2015 spared no subsector, causing material losses for energy investors and chaos in capital markets. An unprecedented amount of bankruptcies in the E&Ps (oil and gas producers or the upstream business) crippled the energy value chain, especially the midstream sector which had historically depended on debt and equity markets to continuously finance their growth. Following the 70% collapse in WTI crude oil futures, the AMZ index, which represents the bulk of public MLPs (a tax advantaged structure employed by many midstream companies, explained later in the paper), declined over 45% from peak to trough between August 2014 and February 2016. The decline was particularly painful and unexpected for a sector that has traditionally attracted yield-focused investors looking for energy infrastructure exposure.