How our rigorous approach midstream energy investing leads to success

 In Insights

More than $800 billion, or $44 billion per year, in midstream infrastructure investment is needed in North America by 2035 to meet U.S. and Canadian energy demand. This provides significant long-term investment opportunities for those with the acumen and expertise to capitalize on this prolific growth.

The investment team at the Strategic Pipeline Income Fund believes its energy expertise combined with a disciplined, rigorous and repeatable investment process provides it with the edge to consistently deliver competitive returns.

The Fund was formed with the twofold objective of delivering a tax-advantaged 12% annual dividend, paid monthly, along with long-term capital appreciation. To meet these objectives, our investment team –who has extensive experience in the energy sector – applies a rigorous three-point process when seeking out opportunities. We believe this process gives us a competitive advantage when evaluating risk and reward intelligently across the energy universe.

Here’s what we do…. And how it keeps us ahead of the game….

#1 Conduct in-depth, multifaceted market analysis

On an ongoing basis, we analyze the critical factors driving supply and demand in the North American energy infrastructure market. We focus on areas of tremendous opportunities, including the Permian Basin, the Bakken Shale, and Eagle Ford Shale. What makes these areas attractive is their tremendous upside potential to capture much of the forecasted infrastructure investment over the next 15 to 20 years. We are relentless in uncovering changes in market conditions early on in these areas so that we can act accordingly during our investment selection and review processes.

#2 Strategically select assets

Not all energy infrastructure assets are created equal, so we take a strategic approach to determining the specific types of assets we want to invest in within our geographical focus. Our initial criteria is to identify opportunities that provide

  • Attractive current income
  • Low volatility
  • Minimal downside risk

We further conduct in-depth fundamental analysis that compares quantitative, qualitative, and relative value factors for each opportunity under review. This extensive analysis includes an assessment of many factors including:

  • Overall attractiveness of the specific segment in which an investment is involved
  • The company’s specific competitive position within that segment
  • Potential commodity price risk
  • Supply and demand
  • Regulatory considerations
  • Stability and potential growth of the company’s cash flows
  • Management track record

By conducting this comprehensive evaluation for each and every investment opportunity under review, we’re able to formulate a strong conviction whether to invest in the asset, or rule it out for the fund.

#3 Monitor our investments with vigilance

We are dedicated to ongoing monitoring of the assets in the Fund. Our investment team has formulated initial hypotheses for each asset prior to the fund manager including it in the portfolio. Disciplined monitoring for positive and negative deviations from initial hypotheses empowers us to add to positions that provide greater upside potential than anticipated, as well as make decisions to capture gains and redeploy that capital from those investments which have reached their potential.

The midstream energy infrastructure sector provides significant opportunities for accredited investors seeing a way to diversify away from the broader stock market. Our Strategic Pipeline Income Fund is designed for accredited investors seeking to participate in these opportunities, while earning a tax-advantaged 12% annual dividend.

Read the Fund’s Investment Summary to learn more about how the Fund can fit into your portfolio.

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