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Rating:An MLP Specialist Enters the ETF Biz Not Rated 0.0 Email Routing List Email & Route  Print Print
Friday, October 10, 2014

An MLP Specialist Enters the ETF Biz

Reported by Neil Anderson, Managing Editor

A New York City-based MLP specialist just entered the mutual fund business, in the active ETF style.

This month Jay Hatfield of Infrastructure Capital Advisors unveiled the InfraCap MLP ETF, which invests in "high-quality, midstream energy master limited partnerships (MLPs) and related general partners." Hatfield's initial distribution targets are RIAs and individuals managing their own IRAs and the like, though he aims to distribute through broker-dealers, too, as the fund develops a track record. Watch for Hatfield to launch more ETFs down the line.

"We envision having a series of products focused on generating income from real assets," Hatfield tells MFWire.

Hatfield teamed up with New York City-based ETF Issuer Solutions (ETFis) to launch the ETF. ETFis is the advisor to the fund, while ICA subadivses.

"They had substantial expertise in the area, and were open to entrepreneurial firms like us in terms of subadvising," Hatfield says.

Matt Brown, CEO and co-founder of ETFis, praises Hatfield as someone "whose investment thesis is really in demand among retail investors and in the ETF marketplace."

"This is the first active MLP ETF," Brown tells MFWire.

A former investment banker and hedge fund alum, Hatfield launched Infrastructure Capital Management six years ago. After a hedge fund focused start, he shifted to MLPs. He and Mike Krimbill co-founded an MLP, NGL Energy Partners, which is now publicly traded.

Hatfield launched his RIA, Infrastructure Capital Advisors, two years ago. He sees a "real opportunity to do something more focused on the retail opportunity" with MLPs. His pitch is that ICA's offering can outperform thanks to his stock selection strategy (investing in MLP general partners and watching out for corporate events), its option strategies, and his selective utilization of leverage. Putting all that in an ETF structure, Hatfield says, makes a big tax simplicity difference for retail investors. 

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