MLPs: This Time Is Different

On another topic, last week we fielded a few questions from holders of Rice Midstream Partners (RMP). EQT recently acquired RMP’s General Partner (GP) Rice Energy (RICE). RMP slumped, because it highlighted a theme of our investing, which is that you don’t need to own an MLP to control it; owning the GP is sufficient. RMP investors have few rights, and the supply of accretive dropdowns they were expecting from their GP will now be redirected to EQM, a loss of future value over which RMP investors have little recourse. It’s why we invest in GPs (see MLPs and Hedge Funds Are More Alike Than You Think).

We are invested in EPD, EQGP (GP of EQM), Oneok (OKE, GP of OKS) and Williams Companies (WMB, GP of WPZ).

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Disclosure: None.

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