Investors in master limited partnerships expect that their private equity managers are preparing to take advantage of MLP industry distress, even as they keep tabs on their disappointing MLP portfolios.
Officials at the $20.1 billion New Mexico State Investment Council, Santa Fe, are monitoring their MLP portfolio, said Charles Wollmann, spokesman.
The council has $450 million committed to an MLP separate account managed by Harvest Fund Advisors LLC.
“We won’t pull our money out at this juncture,” Mr. Wollmann said. “We are paying attention to the strategy and our exposure to it.”
At the same time, Mr. Wollmann expects the council’s private equity managers are looking at the troubled MLP industry.
“We would be shocked if they were not reviewing this distressed segment of the investment world,” he said.
“All kinds of managers are looking at the opportunity that might present.”
New Mexico Public Employees Retirement Association, also in Santa Fe, has roughly $100 million invested in MLPs, said Jonathan Grabel, chief investment officer of the $13.4 billion pension fund.
“It’s a challenging allocation,” Mr. Grabel said. “MLPs have proven to be more highly correlated to commodity prices than people thought.”
He added he would expect alternative investment managers to be looking at MLPs because many of them believe MLPs are hitting their bottom.