Introducing The Twin MLP Fund Line™ At A Glance

First
Quarter
PRODUCERS
2014
END USERS
INFRASTRUCTURE
Introducing The TwinLine™ MLP Fund
At A Glance
Ticker Symbols:
Class A: BPMAX
Class I : BPMIX
BP Capital TwinLine™ MLP Fund is a concentrated portfolio of energy infrastructure Master Limited Partnerships
(MLPs) and their affiliates that build, own and operate pipeline and energy infrastructure assets with an emphasis
on “core midstream”—transportation, gathering & processing and storage. The Fund seeks total return
comprised of long-term capital appreciation through potential distribution growth along with current income.
CUSIP:
Class A: 74316J 276
Class I : 74316J 268
Investment Team:
Mark Easterbrook, CFA
Toby Loftin
Mark Laskin, CFA
David Meaney
Brian Bradshaw
Billy Bailey
Tim Dumois
Target Characteristics of Portfolio Holdings:
Total Years of Investment
Experience:
101 Years
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•
•
•
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Relatively stable cash flows derived from toll-road style business models and visible distribution growth
Contracts with inflation-linked tariff and fee escalation as a hedge against inflation
Strong balance sheet and healthy coverage ratios
Superior asset footprint acts as “moat” to competitors
Well-capitalized sponsors or general partners
Strategy AUM:
$5.4 Million
Why BP Capital Fund Advisors?
Strategy Inception:
Dec 31, 2013
BP Capital LP was founded in 1997 by T. Boone Pickens whose name is synonymous
with energy investing. The BP Capital team has managed billions of dollars in public
and private energy investments since the 1950’s, leveraging in-house research,
extensive on-the-ground operating experience, and deep relationships within the
energy industry that offer access to industry management teams and experts. BP
Capital Fund Advisors was formed in June 2013 to, for the first time, offer the investing
public a fund vehicle to invest alongside Boone Pickens and his team. The BP Capital
TwinLine™ MLP Fund offers exposure to our highest conviction energy infrastructure
investments related to the American energy and industrial renaissance.
Benchmark:
Lipper Equity Income Funds Index
Number of Holdings Range:
Approximately 20-30
Top Ten Holdings:
Access Midstream Partners LP
EnLink Midstream Partners LLC
Enterprise Product Partners LP
NGL Energy Partners LP
ONEOK Inc.
Phillips 66 Partners LP
Plains GP Holdings LP
Sunoco Logistics Partners LP
Valero Energy Partners LP
Western Gas Equity Partners LP
Top ten holdings represent 57.7% of
the portfolio
Fund Characteristics:
• Form 1099 [No K-1s]
• Daily liquidity at NAV
• IRA/401(k) eligibility [No UBTI]*
• Asset class with low correlation
to broader markets
• Tax conscious investment via
significant return of capital and
low turnover
Style Map:
Large
Cap
Mid
Cap
Small
Cap
Value
Boone Pickens
The team launched the BP Capital TwinLine™ Funds as a mark of “twinning” alongside the legacy of T. Boone Pickens.
Much like the practice of midstream companies who lay new pipe alongside an existing pipeline in an effort to leverage
existing infrastructure (a practice known as “twinning” pipe), the BP Capital TwinLine™ Funds will continue to leverage the
industry knowledge, investment experience, deep relationships and trust earned over the past 60 years.
YTD Fund Performance
(as of 3/31/14)
BP Capital TwinLine™ MLP
Portfolio Sub-Sector Weightings:
6.00%
5.00%
10.0%
4.90%
9.0%
4.00%
3.00%
1.87%
2.00%
39.0%
42.0%
1.00%
0.00%
BP Capital TwinLine MLP Fund
Alerian MLP Index
Natural Gas/NGL
Crude Oil/Refined Product
Gathering/Processing
Other/Cash
Blend Growth
Equity style box is based on the portfolio’s
overall targeted capitalization range and relative
valuation as determined by BP Capital Fund
Advisors.
Returns quoted represent past performance, which does not guarantee future results. Current returns may be lower or higher. Performance current to the most
recent month-end may be obtained by calling 1-855-40-BPCAP (1-855-402-7227). Investment return and principal value will fluctuate so that shares, when
redeemed, may be worth more or less than their original cost. Fund returns shown are cumulative total return for Class I and reflect an expense limitation in
effect through 12/31/2015. Returns would have been lower without the expense limitation. Total annual operating expenses for Class I, prior to the expense
limitation, are estimated at 1.85%. Class A returns are different due to different charges and expenses.
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First
Quarter
PRODUCERS
END USERS
2014
INFRASTRUCTURE
Benefits As Unique As Our Founder
Having established an understanding of how supply and demand patterns could shift over time and their implications
for energy infrastructure, we undertake detailed bottom-up analysis of individual companies with exposure to the trends
identified. This process helps identify companies with potential for above-average distribution growth over multiple years
and also helps avoid potential trouble spots.
Specifically, We:
• Identify specific catalysts expected to drive cash flow growth which are used to measure upside potential and downside risk
• Employ multiple valuation methodologies including discounted cash flow analysis, yield-based valuation, and sum-of-the-parts (SOTP) NAV
• Monitor the strength of target balance sheets, liquidity, access to capital markets, cost of capital, management team incentives and governance
Our Investment Process Is Driven.
We construct the portfolio based on both topdown analysis of the global energy landscape
and bottom-up company/partnership specific
analysis to find those investments best suited
for inclusion. We begin with an evaluation of the
broader energy markets and trends. We then
establish the implications across the energy
value chain, specifically, energy infrastructure—
gathering & processing, pipelines, and storage.
Finally, we discern among the companies/
partnerships who meet the investment criteria
and select those which build the optimal return
vs risk combinations.
IDEA GENERATION & RESEARCH
Idea Sourcing
INVESTMENT SELECTION
Portfolio Management
• Macroeconomic & energy commodity research
• Intimate knowledge of the energy value chain
• Cash flow and credit analysis
• Evaluation of contracts
(type, counterparties, & duration)
• Measuring key risks
• Communication with C-level
management and industry contacts
• Identifiable, catalyst-driven growth
• Bottom-up, asset specific sum-of-the-parts
NAV analysis
• Sensitivity analysis and stress testing of models
• Evaluation of expected returns versus risk—
upside/downside
MONITORING
Evaluation
• Establish parameters on upside return/downside risk and disciplined execution
• Changes in balance sheet, leverage, liquidity, cost of capital, distribution coverage
• Commodity, basin, geography, industry/sector
• Changes in story or management
* MLPs and MLP investments have unique tax characteristics. In general, an investment in the Fund will not generate unrelated business taxable income (UBTI) for tax-exempt U.S. investors. Neither the Fund nor the
investment adviser provide tax advice. Please consult your tax advisor before making an investment. The Fund does not receive the same tax benefits of a direct investment in an MLP
The BP Capital TwinLine™ MLP Fund (“Fund”) is “C” corporation registered under the Investment Company Act of 1940 as an open-end management investment company, commonly known as
a mutual fund. The Fund seeks capital appreciation through distribution growth along with current income, primarily by investing in energy infrastructure master limited partnerships. The Fund
may invest in companies of any size and in initial public offerings. Up to 20% of the Fund’s assets may be invested in debt securities rated below investment-grade, commonly known as high-yield
securities or junk bonds. The Fund also may also invest in derivatives (futures, options, swaps, forward contracts).
As with any mutual fund, it is possible to lose money by investing in the Fund. The Fund is new, with a limited operating history upon which to rely in determining whether to invest. The Fund
may invest a large percentage of its assets in a small number of issuers, potentially exposing it to greater loss than a more diversified portfolio.
The Fund is treated as a regular corporation, or “C” corporation, for U.S. federal income tax purposes. Accordingly, unlike traditional open-end mutual funds, the Fund is subject to U.S. federal
income tax on its taxable income at the graduated rates applicable to corporations (currently a maximum rate of 35%) as well as state and local income taxes. The Fund will not benefit from
current favorable federal income tax rates on long-term capital gains, and Fund income and losses will not be passed on to shareholders.
Energy-related companies are subject to specific risks, including, among others, fluctuations in commodity prices and consumer demand, substantial government regulation, and depletion of
reserves. Small-cap stocks and initial public offerings may be more volatile and less liquid than securities issued by large companies and seasoned issuers. High-yield bonds involve greater risks
of default, downgrade, or price declines and are more volatile and tend to be less liquid than investment-grade securities. Derivatives can increase the Fund’s volatility because they can be highly
illiquid, difficult to unwind or value, and subject to risk of counter-party default.
Master Limited Partnerships (“MLPs”) are publicly traded partnerships listed on a national securities exchange. The prices of MLP units may fluctuate abruptly and trading volume may be low,
making it difficult for the Fund to sell its units at a favorable price. MLP general partners have the power to take actions that adversely affect the interests of unit holders. Most MLPs do not pay
U.S. federal income tax at the partnership level, but an adverse change in tax laws could result in MLPs being treated as corporations for federal income tax purposes, which could reduce or
eliminate distributions paid by MLPs to the Fund. The Fund also may invest in MLPs that are taxed as “C” corporations.
Investors should consider the investment objective, risks, charges, and expenses of the BP Capital TwinLine™ MLP Fund carefully before investing. A prospectus with this and other
information about the Fund may be obtained by calling 1-855-40-BPCAP (1-855-402-7227). Read the prospectus carefully before investing.
Shares of the BP Capital TwinLine™ MLP Fund are distributed by Foreside Fund Services, LLC, not affiliated with BP Capital. This material shall not constitute an offer to sell or a solicitation to
buy, nor shall there be any sale of securities in any jurisdiction in which such offer of sale is not permitted.
Unlike a mutual fund, index performance is not affected by operating expenses, transaction costs, and taxes. It is impossible to invest directly in an index.
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