Institutional Strategies
Master Limited Partnerships
Fractal’s Energy Infrastructure strategy invests in pipeline and infrastructure companies that are often (but not always) organized as a Master Limited Partnership. A Master Limited Partnership (MLP) is a publicly traded partnership. The nature of the partnership facilitates the “pass through” of income to its partners. This essentially avoids double corporate taxation on profits. Ownership interests in MLPs are referred to as “units.” Investors who own MLP units are considered limited partners of the partnership. The companies in our portfolio move energy, CO2, and water from wellheads to processing and export facilities. These infrastructure assets operate like toll collectors. Rather than highways or airports, MLPs’ main assets are pipelines. They earn a stable income that is often based on long-term service contracts. They pay out the bulk of their cash flows through distributions. Virtually all the companies in our portfolio are developing plans and actively pursuing investments that have low carbon footprints.
Inflation Sensitive
Fractal’s Inflation Sensitive strategy invests in companies we believe will be positively correlated with inflation. Often these companies are price makers, not price takers. They produce materials that serve as inputs into the production process. In doing so their cash flows tend to be highly correlated to inflation.
Special Situation
Fractal’s Special Situation strategy invests in companies, rights, and warrants that are often associated with a corporate action. Often a company will distribute these assets to their shareholders at good values because they are distributing assets to the owner of those assets.