Key energy volume drivers are growing at a time when midstream companies are increasingly showing better business models, greater focus on returns on invested capital, and attracting interest from private equity.
In the following video series, Tyler Rosenlicht, Senior Vice President and Portfolio Manager, and Michelle Butler, Senior Vice President and Portfolio Specialist, discuss why favorable secular, cyclical and valuation factors may currently be aligning in favor of midstream assets.
In our view, North America’s comparative advantage in energy production cost supports our secular case for midstream assets.
A Fresh Take on Valuation►
While midstream companies have looked favorable on valuation metrics specific to the asset class for some time, these companies are now beginning to screen attractively on more traditional metrics that could draw attention from generalist investors.
The Cyclical Case►
From commodity price differentials at various points of the pipeline, to companies repurposing existing pipelines to drive cash flow growth at lower cost, we see multiple factors in support of our cyclical case for midstream energy.