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| David DeWitt of DeWitt Capital, an investment advisory firm at the marcus evans Private Wealth Management Summit Spring 2015, discusses energy-related MLPs and what makes them ideal investments for wealthy families. |
NEW YORK, N.Y., June 6, 2015 - (ACN Newswire) - "All properly diversified portfolios should include five to ten percent in energy-related Master Limited Partnerships (MLPs)," recommends David DeWitt, President & Portfolio Manager, DeWitt Capital. "Over a 16-year period, MLPs have been the top performing asset class compared to utilities, real estate, the S&P bond municipals, small cap stocks and world indexes. MLPs are ideal for high net worth individuals as yields are high and taxes low," he explains.
DeWitt Capital is an investment advisory firm at the marcus evans Private Wealth Management Summit Spring 2015, in Palm Beach, Florida, June 7-9.
- Energy in North America is undergoing a revolution. What investment opportunities has the shale boom created?
There is a need for new infrastructure, such as pipelines, storage and fractionation facilities. MLPs are essentially infrastructure to move oil or natural gas from point A to B. Traditionally, this required shipping terminals but now oil is coming from North Dakota or Texas, gas from Pennsylvania, Virginia or Ohio, which lack infrastructure.
This boom has created a whole world of investment opportunities that will last for decades; MLPS that transport the newly discovered oil and natural gas, and companies that store or split natural gas liquids into butane, propane, or ethane.
- There are environmental and political hurdles in this arena. What is the way around them?
We do not advise investing in drillers or in fracking, but in companies that transport or process what is coming out of the ground. If the drillers are following regulations, it is a safe practice. This is not an issue with large corporations.
- What makes it an especially attractive time to get into this sector now?
There are many reasons. Investors can get a solid yield of around six percent that has historically risen by around five to six percent per year. Around 80-90 percent of the income they receive will be tax deferred.
If you look at the yield of MLPs, it has been 2.5 percent higher than ten-year treasury. It is hard to find anything else that is this solid and has the capability of going higher.
Particularly for high net worth individuals looking to transfer wealth to the next generation, it is an absolutely ideal investment. The first generation can take advantage of the high and increasing yield, while the subsequent generation will not have to bear any related taxes.
An IRA is tax deferred in which the next generation pays income tax with variable annuity, and pays income tax to access the tax-deferred growth. With MLPs the next generation pays no income tax on the accumulated deferred growth of the assets. This is perfect for high net worth families.
- What are some of the risks?
In the short run, MLPs tend to move in relationship to the price of oil. Between August 2014 and beginning of 2015, the price of MLPs came down 20-25 percent when oil dropped around 60 percent. However, yields continued to go up. This should not bother long-term investors as we do not invest in oil exploration or production, and the correlation with the transportation and processing part of the industry is lower.
The power of MLPs is long-term investing. With dividends going up every year, investors get the leverage effect of increasing distributions over time. Market volatility is a short-term risk.
How does the US energy market compare with that of other countries?
What is interesting about the US is that we can produce more or less depending on the price of oil. This puts us in a unique position. Other parts of the world are running at full capacity.
About the Private Wealth Management Summit Spring 2015
The 16th Private Wealth Management Summit is the premium forum bringing leaders from America's leading single and multi-family offices and service providers together. Taking place at the Eau Palm Beach Resort & Spa, Palm Beach, Florida, June 7-9, 2015, the Summit includes presentations on generational planning, trends in family office investing, conducting due diligence on alternative investments, strengthening client relationships and what to expect in the years ahead.
For more information please send an email to press@marcusevanscy.com or visit the event website at www.privatewealthsummit.com/DavidDeWittInterview
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About DeWitt Capital
For the last 23 years, DeWitt Capital Management has been investing in energy-related Master Limited Partnerships (MLPs). With their tax-advantaged income, opportunity for capital appreciation and estate planning benefits, MLPs are valuable additions to client portfolios. DeWitt Capital Management has a track record that outperforms the broad market and MLP-specific benchmarks.
DeWitt Capital Management has invested in MLPs since 1991 and currently manages MLPs in SMAs for clients of advisors, family offices, foundations and institutions as well as high net worth clients. We also invest in energy infrastructure using C corporations that could be general partners, or companies that are related to MLPs.
Security elections are core and tactical. We attempt to invest in those MLPs that have a high rate of future cash flow growth. www.dewittcm.com.
Contact:
Sarin Kouyoumdjian-Gurunlian
Press Manager, marcus evans, Summits Division
Tel: +357 22 849 313
Email: press@marcusevanscy.com
Topic: Press release summary
Source: marcus evans Summits
Sectors: Daily Finance, Daily News
https://www.acnnewswire.com
From the Asia Corporate News Network
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