Recently, Jonathan A. Schein, senior vice president, managing director of global business development for Institutional Real Estate, Inc., spoke with Tyler Rosenlicht, senior vice president and a portfolio manager for Cohen & Steers’ infrastructure portfolios, with an emphasis on MLP and Midstream Energy strategies. The following is an excerpt of that conversation.
MLPs have had a challenging several years. What happened?
MLPs have underperformed the broad market pretty dramatically since late 2014. To understand the sell-off, let’s go back to what the market looked like before the downturn. From 2010 to 2014, there were strong fundamentals for North American energy and midstream businesses, along with high, stable energy prices. The shale renaissance was in full force, driving production growth in North America. Pipeline capacity was tight, and midstream companies had unconstrained access to capital because these businesses were en vogue.