A Master Limited Partnership gets to enjoy the benefits of two worlds of a limited partnership as well as a company trading in public securities. It gets to have the liquidity of all public traded securities as well as the tax benefits of any limited partnership company. If an MLP wants to enjoy benefits of tax then they need to make their incomes through sources that are considered qualifying like through extracting, refining gas and oil and mining explorations. They need to have at least 90% income from all these qualifying sources. Even certain companies whose main source is receiving rent from real estate can be considered to be a MLP.
Why invest in MLPs?
MLP investing is one of the newest ventures of investing that has gained a lot of prominence in today’s market. Some of the benefits of investing in this fund are as follows:
- It helps to combine a complete focus on current income with strong returns. It makes sure that the investor can have a high rate of income through a growing and steady income of the present.
- It has a low risk attribute and a high return attributes. An investor’s main objective is to get high returns from the fund invested. But high risk factors are a problem of high returns. MLP investing has low risk factors even though it promises high returns.
- The process of investing in MLP is comparatively easier than investing in other securities.
Jay Hatfield and his contributions to MLP Investing
Having started his career as a CPA in Ernst and Young, Jay Hatfield has made a name for himself as a co-founder of Infrastructure Capital advisors, one of the best financial advisors. He has formulated many strategies for investment in MLP which has been used all over the world. He has worked as a Head Financial Advisor in many reputed companies. He has spoken about the risks which are involved in investing in MLP funds along with giving plans on how to decrease these risks. He has often cited examples which has proved the low risk attributes of MLP investing.
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