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May 27, 2011

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MLP Conference Surprises

There were a few surprises this year at the MLP conference, I’ll try to summarize some of them below.


Boardwalk Equity – Last year, WES issued equity immediately after the conference. I spoke with Benjamin Fink (CFO of WES) about the offering last year, and how awkward the last few one on one meetings were before the press release for the equity offering went out. Turns out he was asked directly about when they would be issuing equity and he couldn’t say anything. This year, it was BWP, who launched an equity offering immediately after the conference, on the day they presented no less. Must have been awkward.


No ETP – A late scratch from the agenda that was discussed around the hallways at the conference was ETP. ETP and RGNC (which share the same GP: ETE) apparently decided to bail on the conference at the last minute. Not sure what that means is going on. It could be ETP management doesn’t like someone at NAPTP, or a sponsor, but perhaps they didn’t want any awkwardness because they are planning a big announcement soon. Speculation was potentially they are folding RGNC into ETP. I don’t think that’s what it is, because RGNC is in a lower IDR tier than ETP, which makes a big cost of capital difference in terms of trying to grow. It could be they found a buyer for their propane business, or maybe they have found something to buy. I have no idea, but they weren’t at the conference.


Coal MLPs Bullish on Coal – This year Joe Craft and Nick Carter were bullish on coal generally, citing many stats about how important coal was to the future of this country…just kidding, this is not surprising at all…


Half a Loupis – Kyri Loupis, my former boss and one of the few readers of this blog, is also Goldman’s retail MLP portfolio manager. It’s fairly typical for him to show up at the conference for half a day, before getting frustrated that he’s away from the market action and leaves. This year, the surprise was that half of Kyri showed up for almost a whole day. As we discussed at lunch Wednesday, Kyri is adding AUM and shedding Lbs, which I guess will happen when you’re busy trying to figure out how to invest literally millions of new money that flows in daily from Goldman’s retail system.

It was great to see a svelte Kyri, and the rest of the old gang. I counted 7 former colleage that are still investment bankers at Barclays, plus another4 from the old team that had moved on to other banks. Amazing.
Disclosure: The information in this article is not meant to be financial advice, we are not your financial advisor and I am posting my comments for informational purposes only. Long ETP, RGNC, BWP.

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