Infrastructure at a Glance
Infrastructure is defined as the physical components of interrelated systems providing commodities and services essential to enable, sustain, or enhance a society’s living conditions. These assets serve as vital links to economic stability and growth.
Energy infrastructure assets transport, store, gather and/or process crude oil, refined petroleum products (including biodiesel and ethanol), natural gas or natural gas liquids and provide electric power generation (including renewable energy), transmission and distribution.
Midstream Publicly Traded Partnerships (PTPs) in the United States present a unique investment opportunity for investors. PTPs, or master limited partnerships, own, manage and operate real assets in the “midstream” sub-sector of energy infrastructure connecting “upstream” drilling and development of oil and gas production to “downstream” consumption.
These companies operate critical tangible assets that connect sources of energy supply to areas of energy demand. These businesses are essential to economic productivity and experience relatively inelastic demand.
Tortoise’s Energy Infrastructure Expertise
Tortoise Capital Advisors specializes in the energy infrastructure sector of the infrastructure asset class. We serve as a strong and reliable resource to our investors on the broad asset class of infrastructure, as well as our specific subsector.
Our energy infrastructure investment strategy is anchored in our fundamental principles of yield, quality and growth. We anticipate that our targeted investments will be in companies that generally have the following characteristics:
- High current yield—generally generate a current cash return at the time of investment.
- Predictable revenues—stable and predictable revenue streams, often linked to areas experiencing demographic growth and with low commodity price risk.
- Stable cost structures—relatively low maintenance expenditures and economies of scale due to operating leverage.
- High barriers to entry—operating assets that are difficult to replicate due to regulation, natural monopolies, availability of land or high costs of new development.
- Long-lived assets—operate tangible assets with long economic useful lives.
- Experienced, operations-focused management teams—management teams possessing successful track records and who have substantial knowledge, experience, and focus in their particular segments of the power and energy infrastructure sectors.