Master limited partnerships, which provide the tax benefits of a limited partnership with the liquidity of publicly traded securities, are becoming more popular among accredited investors.
MLPs have been a favorite investment of ultra-affluent members of Tiger 21, the peer-to-peer investment group, according to a statement released Tuesday by the organization.
Tiger 21 said that although members’ investment holdings were not recorded, many of those invested in MLPs reported having 5% to 20% exposure in their portfolios.
It said members gained exposure through MLP funds, direct investments into individual MLP equities in members’ personal portfolios or via baskets of these equities managed by advisors.
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North America’s booming oil and gas industry appears to have contributed to the ascendance of MLPs, which focus mainly on the energy sector, Tiger 21 said.
Many investors are attracted, among other things, to the income yield these vehicles provide in the current low-interest rate environment and the beneficial tax treatment.