233 S. Detroit Ave., Suite 100 (918)

Transcription

1 233 S. Detroit Ave., Suite 100 Tulsa Oklahoma Tulsa, (918)

2 Pinnacle s Investment Expertise One of the first private funds of Publicly Traded Master Limited Partnerships in the U.S. Investing in MLPs since 1997 Over $210 million managed in MLPs Strong historical performance Deep industry relationships Understanding of unique tax aspects of MLPs Pinnacle s Experienced Team SEC registered investment advisor for eighteen years Over $710 million Total Assets Under Management Over 130 years combined experience from seven members of team including CFA (2), CFP, CPA, JD, MBA (3). Strong credit analysis background 2

3 Pinnacle s Strategy t Objective Generate excellent rates of total return through a combination of cash flow and capital appreciation i Confidence in quantification of future cash flows allows for higher weighting in positions. Identify which publicly traded MLPs have the highest growth potential and ability to raise distributions : Distribution Coverage Ratio Debt Capacity Organic Growth Projects Drop Down Acquisitions Sponsor Strength Portfolio Characteristics: Heavier Weighting Publicly Traded General Partners MLPs with no General Partners or Capped IDRs Small Cap MLPs with Strong Growth Potential Usually Avoid Upstream MLPs and Variable Payout MLPs. Restructurings 3

4 Risk Management High cash flows reduce duration of portfolio investments Credit analysis/quantitative Analysis Diversification by Sector and Position Position Limits 10% maximum for any one company. Daily Monitoring of Company and Industry News Regular updating of our company models 4

5 Idea Generation Proprietary fundamental research on MLP universe Deep knowledge of energy infrastructure sector Visibility on asset movement into MLP space Discussions with MLP managements, industry contacts, consultants, and asset brokers Publicly Traded Partnership Conferences 5

6 Security Analysis Distribution Yield Growth Potential Acquisition Multiples Internal Growth Projects Management Track Record Distribution Coverage LP/GP Analysis Commodity Exposure 6

7 TCERS Current Portfolio Holdings 4/30/2014 / 7

8 TCERS MLP Portfolio Sector Weighting gcomparison Versus Alerian MLP Index 4/30/2014 MLP Sector Breakdown Sector TCERS Portfolio Alerian MLP Index Difference Petroleum Transportation (6.4) Gathering & Processing Propane Natural Gas Transportation (7.5) Exploration & Production (5.5) Other Cash Total

9 TCERS MLP Portfolio Sector Weightings 4/30/2014 Shipping Propane Upstream 71% 7.1% 3.0% 1.0% Cash 2.5% Misc. Services 2.5% Coal 2.1% NGL Pipeline, Storage & Logistics 15.1% Refined Product Pipeline, Storage & Logistics 9.0% Crude Oil Pipeline, Storage & Logistics 20.2% Natural Gas Pipeline 6.7% Gathering & Processing 30.7% 9

10 TCERS MLP Portfolio Performance Inception Date 10/16/2012 Period Ending 4/30/ Cumula ative TWR Time Period Portfolio Alerian MLP Total Return Index Period Annualized TCERS MLP Portfolio Alerian MLP Index

11 MLP Sector Outlook Significant midstream energy infrastructure growth Historic growth in crude, natural gas and NGL production necessitates continued investment INGAA estimates total midstream capital expenditures to be: $640.9 Bil Natural Gas Capital Spending: $313.1 Bil (up from $213.3 Bil in prior study) Crude Oil Capital Spending: $271.8 Bil (up from $32.6 Bil in prior study) NGL Capital Spending: $56.0 Bil (up from $15.1 Bil in prior study) Sector valuations Total Return Expectations Remain Strong Expected distribution growth Relative valuations remain attractive Growth of the Sector Increased institutional participation, even foreign institutions providing needed capital Increasing number of MLPs provide increased opportunity for active management 11

12 Contact David M. Poarch Managing Partner P: (918) F: (918) S. Detroit Ave., Suite 100 Tulsa, Oklahoma