Tortoise Power & Energy Infrastructure Fund's (TPZ) CEO Brad Adam on Q1 2016 Results - Earnings Call Transcript

| About: Tortoise Power&Energy (TPZ)

Tortoise Power & Energy Infrastructure Fund (NYSE:TPZ)

Q1 2016 Earnings Conference Call

April 27, 2016 4:00 PM ET


Pam Kearney – Director-Investor Relations

Brad Adam – Managing Director and Chief Executive Officer

Brent Behrens – Director-Financial Operations

Rob Thummel – Managing Director

Matt Sallee – Managing Director



Greetings and welcome to Tortoise Capital Advisors Quarterly Closed-End Fund Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host Pam Kearney.

Thank you. You may begin.

Pam Kearney

Thank you and good afternoon all. I am Pam Kearney, Director of Investor Relations at Tortoise Capital Advisors. As a reminder, some of the statements made during the course of this call are not purely historical and may be forward-looking statements regarding our intentions, projections and strategies for the future.

These statements are subject to various risks and uncertainties and actual outcomes and results may differ materially from our forward-looking statements. We do not update our forward-looking statements. And this presentation is provided for information only and shall not constitute an offer to sell or a solicitation of an offer to buy any securities.

And with that, I will turn the call over to Brad Adam, Managing Director and CEO of our closed-end funds.

Brad Adam

Thanks, Pam, and thank you all for joining the call today. Joining me on today’s call is Brent Behrens, Tortoise’s Director of Financial Operations; Rob Thummel and Matt Sallee, both Managing Directors and Tortoise Portfolio Managers.

We’ll begin with some prepared remarks; we will then address some recent questions we have been receiving and then open it up to your questions. As we look back on the first quarter of 2016, it really was a tail of two halves for the energy sector. It began with the severe decline, hitting an inflection point in midway and seeing improved performance during the second half of the quarter.

A production freeze proposed by OPEC and certain non-OPEC producers creates some optimism in the global oil markets, driving an uptick in oil prices. Although there was no agreement reached in dell hard [ph] a freeze production, other factors have impacted the price of oil with WTI trading in the mid $40 range today.

Although the broad energy sector including pipeline corporations saw some stabilization throughout the quarter, MLPs continue to face some headwinds including concerns about capital market access, credit ratings, capital expenditure reductions and counterparty risk. Even though public capital markets have become less accommodative for midstream companies during this period of market volatility, some midstream MLPs have secured alternate forms of funding such as through preferred equity private placements.

It’s important to note that not all MLPs are created equal and fundamentals in the midstream segment that the energy value chains have appeared remain intact. We focused on what we believe are high quality companies that have maintained solid balance sheets, stable cash flows and distribution payouts underscoring our conviction in this space.

The positive momentum from the second half for the quarter has carried over to the closed-end funds with improved performance and daily trading volumes trending closer to more normal levels with less market speculation. You will hear much more from our portfolio managers Rob and Matt on these topics, but now I’ll turn the call over to Brent for an update on our closed-end funds performance year-to-date through last Friday April 22, use of leverage and views on distributions.

Brent Behrens

Thanks, Brad. I’ll set through review of our funds across the energy value chain. Along with more positive sentiment in the broad energy market, our fund returns have also improved since our last call beginning with upstream. As reminder, NDP invests in oil and gas producers that in our view are located in the best locations and the best oil and gas fields within North America. The fund also utilizes a covered call strategy.

NDP’s market based total return was 5.5% and its NAV-based total return was 4.7% for the first calendar quarter ending March 31. Within the midstream space, TYG, NTG and TTP focus on high quality companies with strategic assets providing visible, growing cash flows, and strong balance sheets and distribution coverage. TYG’s first quarter market-based total return was negative 9.3% and the NAV-based total return was negative 6.4%. NTG had a market-based total return of negative 3.5% and a NAV-based total return of negative 3.5% as well for the same year.

TTP invests in diversified pipeline equities, along with some independent energy companies and utilizes a covered call strategy. It had a market-based total return of 4.6% and a NAV-based total return of 4.7% for the first calendar quarter. Finally, TPZ is a downstream strategy, which invests primarily in power and energy infrastructure fixed income with the remainder in equities. It had a market-based total return of 6.3% and a NAV-based total return of 1.4% year-to-date through March 31st.

Fund returns have shown incremental improvement this month improving between 7% and 20% on a market value basis and between 10% and 15% on a NAV basis through last Friday, April 22nd. Managing leverage remained the central focus and some deleveraging was necessary earlier in the year to maintain adequate cushion over asset coverage requirements. For those, who want to follow this information, we report updated leverage amounts and ratios on our website each week.

While selling securities to reduce leverage reduces the revenue side of distributable cash flow, there are other factors included in distributable cash flow or DCF to consider. Growth in the distributions from portfolio investments, reduced leverage costs as a result of lower leverage, and changes in asset value-based expenses including management fees and administration expenses will all factor into DCF.

Now moving onto distributions for the first fiscal quarter. We maintained NDP’s quarter-over-quarter distribution of $0.4375 due to in part to the covered call premiums that we have continue to earn that are enhanced in volatile markets. Our goal with MLP closed-end funds, MLP focused closed-end funds, TYG and NTG is to establish and maintain what we believe to be adequate distribution coverage, supporting our emphasis on long-term distribution sustainability.

Our focus on high-quality companies that have continued to generate solid cash flows allowed us to maintain quarter-over-quarter distributions of $0.6550 for TYG and $0.4225 for NTG. Last year, we communicated that TTP’s quarterly distributions for 2015 would include a baseline distribution amount from DCF and a portion of the expected capital gains required to be distributed during the year.

The first quarter 2016 distribution of $0.4075 reflects our historical baseline distribution supported by DCF. However, we do not anticipate that same level expected capital gains following recent market declines. The elimination of the capital gain component resulted in the 9.4% reduction as compared to the fourth quarter distribution. TPZ second quarter 2016 monthly distributions of $12.5 reflect our historical baseline distributions supported by DCF. However, similar to TTP we do not anticipate the same level of capital gains following recent market declines. So the elimination of the capital gain component resulted in a 9.1% reduction as compared to the monthly distributions paid for first quarter of 2016.

Looking ahead, we're closely monitoring the earnings announcements from our portfolio of companies. Our Board will assess this information when they meet early next month to discuss declarations of what they believe to be sustainable distributions. Fund distribution rates have lowered since last fiscal quarter end as prices have rebounded. As of April 22, distribution rates were as follows, TYG with 9.3% NTG at 9.4%, TTP at 9.2%, TPZ at 8.1% and NTP at 13.4% these rates compare to the Tortoise MLP index average of 8.2% also in April 22.

With that I will turn the call over to Rob Thummel to give our perspective on the upstream segment of the energy value chain. Rob?

Rob Thummel

Thanks, Brent. Oil and gas producer performance had a strong start to 2016 with the Tortoise North American oil and gas producers index or TNEP returning 7.5% for the first quarter our performing the S&P 500 index by more than 6%. The tide certainly seems to be turning with regard to investor sentiment. Natural gas producer stocks were the best performers for the quarter, in particular Marcellus natural gas producers rose on average by 28% to start 2016.

And TNEP's total return performance was 23.5% year-to-date through last Friday. Capital markets for oil producers were active in the first quarter with more than $9 billion of equity capital of an additional almost $10 billion of debt capital raised during the quarter. There were 16 equity offerings with an average size of 551 million offered at an average discount of 6%.

Moving to fundamentals, we feel the current commodity cycle has ended with oil prices bottoming out in February. This long painful cycle lasted 568 days from peak to trough. It will go down as the second-longest commodity cycle in history with oil prices falling by 76% from of $107.62 on July 23, 2014 to a trough of $26.21 on February 11, 2016.

There's a limited amount of spare capacity available to OPEC to fill long-term global demand. There's no margin for error in OPEC production right now. This was evident after the Doha disaster. Although OPEC and Russia were unable to reach an agreement to freeze production. The secondary story of a Kuwait oil field worker strike that lasted three days from moving up to 1.6 million barrels per day of production from the market resulted in oil prices trading higher post the Doha meeting, contrary to analyst expectations.

We think the key to calling the bottom on oil prices is the U.S. oil production decline, lower U.S. crude oil production is necessary to rebalance the global supply and demand markets, and the decline in U.S. oil production has been accelerating. We remain confident that U.S. production, oil production will continue to decline in 2016, and possibly into 2017 due to the continued decline in the US rig count, which is fallen by more than 77% since the 2014 peak and is at its lowest level this century.

Of the four large shale plays in the US, the Bakken has the steepest decline experiencing an 86% drop in the rig count. Interestingly, two of the hot shale basins in the past were the Barnett and Fayetteville shale and they currently have zero – one and zero rigs respectively drilling new wells.

The EIA forecasts U.S. crude oil production to average around 8.6 million barrels per day in 2016 which is approximately 800,000 barrels per day lower than the average production in 2015. With OPEC producing nearest its maximum capacity the global supply and demand balance could become out of balance in a good way in the second half of 2016. Assuming a 1.2 million barrel per day increase in global oil demand and coupled with an 800,000 barrel per day decline in U.S. production results in global demand exceeding global supply.

The oil market moves from being over-supplied to being under supplied. This would require a decline in both U.S. and global inventories to balance the oil market. One key assumption is that OPEC production volumes remained flat at current levels. Longer term, the declining U.S. production needs to stop and we estimate that it – we will need to see at least $50 oil and more likely $60 oil before the decline stops.

U.S. production is critical to supplying long-term demand in the future. And while so much of the spotlight over the last 18 months has been on oil, natural gas prices have experienced a similar plight with prices declining 57% since the fall of 2014. Current natural gas prices are below $2/mcf. You have to go back all the way back to the early 2000’s to see a period, when natural gas prices remained so low.

And similar to oil, the reason for low natural gas prices is higher inventories. Net current natural gas storage levels are well above average levels for this time of year. We experienced a similar event in 2011, 2012 when prices responded positively from strong demand by the electric utility sector using cheap natural gas to replace coal, which increased demand for natural gas, the result increased electric generation demand for natural gas has to switch from coal to natural gas took market share from coal in the electric generation as many coal plants were retired.

Broadly speaking, 2016 is gearing up to be a milestone year for the U.S. energy sector as the U.S becomes a supplier of low cost oil, natural gas and natural gas liquids to the rest of the world. There have already been a series or several first that affirmed the importance of the U.S energy sector in the future. It's the first year in 2016 that U.S produced crude oil is exported outside of North America. 2016 is also the first year that liquefied natural gas or LNG is exported internationally.

And lastly 2016 is the first year in natural gas liquid ethane is shipped to a foreign country. Effectively the U.S has lowered the cost of energy to consumers around the world and the U.S. is expected to be a critical supplier of energy to the rest of the world for the years to come.

Current valuations in the E&P sector represent about $55 per barrel for oil and $2.50 of natural gas prices forever and longer term, we believe that oil and natural gas prices will move higher landing around $70 per barrel for crude oil and $3/mcf for natural gas respectively. Current producer valuations are trading at a 10-year enterprise value to EBITDA multiple of about nine times.

So to summarize, the oil and gas sector is off to a strong start in 2016, outperforming the S&P 500 Index by almost 6% as of March 31, 2016. We believe that the coal current commodity price cycle is over with oil prices having bottomed, supported by the decline in U.S. production happening now, and ultimately expecting the result in an average of production decline of 800,000 barrels per day. The U.S. is assisting in keeping energy cost low to consumers around the world and traditionally low energy cost lead to increased demand for crude oil and natural gas.

2016 has already been a milestone year for the U.S. energy sector as the U.S. becomes a supplier of low cost oil, natural gas and natural gas liquids to the rest of the world. And we believe U.S. shale is here to stay. Longer term crude oil in the Permian, Bakken and Eagle Ford should be a critical supply source to countries around the world. With the energy sector poised for recovery, we believe that the U.S. energy sector is an attractive place for investors to increase their allocations.

On that high note, I'll turn it over to Matt Sallee for a discussion on the midstream and downstream sectors.

Matt Sallee

Thanks Rob for passing it over to me on a high note. We'll try and keep the mood happy.

Well along with the rest of the energy sector, the roller coaster ride I think could be the best description of first quarter performance in the pipeline market as well, yet the market did in the quarter moving higher. Our performance pipeline corporations as represented by the key NAP index outperformed the broader market in the first quarter returning 9.4% and 16.5% year-to-date through last Friday.

Conversely MLPs is represented by the TMLP Index lagged the broader market in the first quarter returning negative 6.1% but turned positive with a 5.9% return year-to-date through last Friday. MLPs are restrained by continued concerns regarding counterparty risk, the potential for volume declines in the potential for distribution cuts.

Capital markets began to thaw ever so slightly from midstream companies in the first quarter with equity and debt offerings, higher for C-Corp pipelines, but clearly down for MLPs. We expect equity and high-yield markets to remain difficult for most MLPs and expect companies to continue to use alternate methods of financing throughout 2016. Consistent with what we thought would play out high quality issuers in the first quarter were first to market, including Magellan on the debt side and Shell on the equity side, we expect a gradual step out along the risk spectrum throughout the year. In the meantime preferred offering served as an alternative means of raising capital to fund CapEx and should continue to take the place of traditional debt and equity as we saw a surge in preferreds during the quarter and expect that to continue as long-term capital markets remain challenged.

Acquisition activity in the first quarter was healthy, but a bit lighter than we expected. MLP currency remains depressed, so drop downs from sponsors will likely be a bigger component of the total until unit prices recover. Our estimates for 2016 through 2018 remain unchanged as we anticipate approximately $20 billion to $25 billion of activity through – per year. Note this does not include MLP to MLP transactions. So all told new MLP estimates anticipate approximately $125 billion of both internal and acquisition activity for the three-year period from 2016 through 2018.

While it is harder to predict, we also expect M&A from C-Corp pipelines to increase throughout the year, especially following TransCanada's announced acquisition of Columbia pipeline group. But one thing we're getting a lot of questions on this counterparty risk. It's financial distress and the possibility of bankruptcies tick higher for upstream companies investors increasingly are worried about counterparty risk for midstream companies serving those producers.

There's been a few court cases, including the high profile negative outcome in the midstream. So being the oil and gas case where the judge issued a non-binding opinion allowing the producer to effectively just cancel their midstream contracts. Alongside that outside of court Crestwood and BlueStone we're able to renegotiate contracts prior to a court ruling in that case. And there is a reminder BlueStone is acquiring Quiksilver's producing assets.

Additionally, some midstream and upstream companies have elected to renegotiate contracts as part of a symbiotic relationship that exists. From a midstream perspective, these renegotiations have resulted in a net present value neutral outcome, something that is imperative to incent midstream providers to participate.

So clearly this is a complicated issue, but there's a few things that we want to point out. In the event over bankruptcy volumes don’t simply go away as the producer still needs to – the midstream company to get their product to market. Hence, they will pay a market-based rate. However, there are contracts that are at risk, we think those most at risk or above market rates or those with the minimum volume commitments that are not currently being met.

Echoing on a comment, we made last quarter, we expect a recovery in crude prices will reduce counterparty risk for pipelines. Especially high quality midstream companies with primarily investment grade counterparties and those were strategic assets, that will continue to operate and drive volumes through them lowering the risk of cash flows declining.

Now Rob already gave an update on crude oil production expectations, the logical question that follows with those production declines is what is that mean for pipelines, while we anticipate some declines in various locations, we reaffirm our view that rail will be the first mother transportation to feel the effect. The numbers support this view, as we've already seen a 450,000 barrel per day drop in rail volumes since the end of 2014. Of note, this is roughly in line with the decline in production that we've seen over the same time period.

Moving to natural gas we've discussed some of the key demand drivers of natural gas for some time. It's nice to see these are starting to materialize specifically LNG exports. As Rob mentioned [indiscernible] its first cargo, which is being pass, certainly won't be the last as we believe we're on a path to 6 Bcf to 10 Bcf per day of exports. We reiterate that demand points including LNG exports, exports to Mexico and natural gas-fired power generation are key and are all starting to gain more traction as we enter the back half of the decade. To emphasize the importance of exports propane inventory levels went from being massively over-supply at the beginning of the year to almost within the five-year range at the top end within just a short three months despite a very mild winter here domestically.

That was directly tied to a surge in exports, which reached a peak in January 2016. More capacity is expected to come online later in the year as well providing increased ability to solve the domestic propane over-supply. Shifting to growth we saw and – as anticipated we saw a drop in our traditional three year capital expenditure outlook compared to last quarter, basically that's a function of 2015 dropping-off and we bring on 2018 into that three-year forward role. This is quite normal when we shift these years, our traditional three-year growth outlook for 2016 to 2018 is approximately $120 billion for C-Corp pipelines and MLPs combined.

For comparison purposes last quarter the 2015 to 2017 period indicated growth CapEx of about a $140 billion. So, it's come down, but most of the difference is a direct result of supply push projects being delayed to more aligned with producer expectations. We continue to expect the potential for rationalization or joint ventures of some existing projects to more efficiently allocate capital. So how do we expect 2017 and 2018 estimates to change throughout the next year or two. We believe these amounts will grow but clearly will be less muted unless we really see a return to higher commodity prices and therefore a renewed focus on supplier push projects to go along with the current slate of demand-pull projects.

Based on our view of crude oil supply demand. We would expect to see 2017 and 2018 gradually build as the market comes back into a balance and eventually U.S. crude production begin to increase again as Rob lined out. During the fourth quarter earnings calls, many MLPs provided their expectations for growth over the next 12 months, and based on that information as well as our financial models. We expect 5% to 7% distribution growth for the entire TMLP index and 6% to 8% growth for the midstream components of that – of the TMLP index.

We expect a median growth rate to take down, while the weighted average growth remains in that 5% to 7% range highlighting the fact that midstream companies and pipeline company specifically remain the best position to grow. Before we leave distribution growth, it's important to point out that recent trading activities left yields exceptionally wide, which may lead some companies to evaluate whether it's better to save those pennies for another day and instead build coverage reduced leverage or internally funded CapEx, if they're not being paid to grow.

Shifting the valuation, the yield on the TMLP Index was 9.4% as of March 31, 2016 and 8.2% as of last Friday's close. This compares to the three year, five year and 10 year medians of 5.9%, 6.1% and 6.5% respectively for the periods – for the period ending March 31, 2016. For pipeline corporations, the TNAP was yielding 5.6% as of March 31, and 5.3% as of Friday – as of last Friday, excuse me. 2016 cash flow multiples for midstream companies are about a standard deviation below historical averages.

As we move to our outlook, we have the current yield plus distribution growth, generating a low to mid-teens total return, again we should point out that our ongoing assumption is that the market applies the same exit yield as we look forward, which clearly has not been the case lately. As we did last quarter, we also evaluate total return expectations across a few different scenarios. Looking at the low case, assuming a static exit yield from the 9.4% yield that we were at quarter end and let's assume growth at its midpoint is only a quarter of our 6% estimate or 1.5%. We will be generating a total return of approximately 9% to 12% over the next 12 months. In a medium case, we assume our base case growth that 6% mid point, but in exit yield it reverts to 8% as opposed to the quarter ends 9.4%. This yield compression generates additional total return – additional return bringing the total return up to just north of 30%.

In our high-case scenario, we assume the same growth rate again 5% to 7% or 6% mid-point with an exit yield of 6%, that's essentially in line with the three year and five-year medians. In this scenario total returns approximate 72%, as we've stated many times, it's pretty hard to difficult – it's pretty difficult to predict that extra yield any given point in time but I just wanted to provide what we think our reasonable scenarios to examine potential return over the next 12 months to 24 months. And I think the bottom line is the probability for further compression is quite a bit higher than yields moving out over the long-term.

Now a few comments on the downstream sectors starting with refiners; refiners benefited from another 3% increase in gas to gasoline demand compared to a year ago, according to the EIA. In addition, refining margins have continued to be healthy due to lower oil prices and despite a narrowing of the differential between US and global crude prices, those refining margins will remain pretty strong. Refiners continued to generate and outsized profits relative to historical levels. Looking at the petrochemical sector it generated strong free cash flow yields due to low cost natural gas and natural gas liquids as well as continued strong demand for their output – for their output products.

Lastly, renewable energy has been negatively impacted by concerns regarding access to capital, high leverage and select corporate restructurings. On the flip side in our view, the strong long-term growth outlook for wind and solar does remain intact. That concludes our thoughts on the energy value chain. So just to summarize pipeline companies continue to trade with crude oil in the short-term, however, we saw some positive signs during the quarter. This includes selected capital market access, more clarity on CapEx budgets and the resulting distribution growth for 2016. A continuation of exports and certain products such as LPGs and a new slate of exports in crude oil, LNG and ethane fueling the next wave of the U.S. energy story.

Finally valuations remain attractive and we feel investors will be rewarded in the long-term as fundamental strength and throughout 2016 and into 2017. Expect more volatility is crude oil will be whipsawed by macro news commentary and Theo political events, but keep in mind the cash flow growth of midstream companies in the portfolio is not reflective of the stock price decline that we've seen.

With that, we'll conclude our prepared remarks and I'll turn it over Pam.

Pam Kearney

Okay. Thank you, Matt. With that let's go over a few recent investor questions. And then open up the call for our listeners for their questions with the time that remained. Brad, I'll start with you.

Do you anticipate that the deleveraging that occurred in the Tortoise closed-end funds over the past few quarters will create long-term risk to future distributions? And the anticipate distribution cuts for the Tortoise closed-end funds?

Brad Adams

All right. Pam, I guess that the short answers to those questions are no and no, but I'll add some color starting with TYG and NTG. Our management team intense recommended the Board to maintain current distributions for TYG and NTG for the second quarter. We've always managed or MLP funds conservatively with the goal of stable and ideally growing distribution payments. As you know, we entered the downturn with modest leverage in reasonable coverage and unlike many MLP closed-end funds, we did not cut distributions in Q1. We've experienced no direct distribution cuts from our holdings and we continue to see dividend increases from our portfolio companies including the current quarter. Keep in mind there is still a rather volatile market in many things could change but this point our expectations that distributions will remain stable.

Now regarding TPZ to TTP and NDP which are RIC funds. RIC fund distributions are inherently more volatile as required to payout income and capital gains. In 2015, we increase distributions in TPZ and TTP to cover the capital gains, but with market declines, those gains have gone away. And in Q1, we reset distributions to the historical baseline distribution from DCF with no capital gain expectations. Keep in mind the distribution determinations ultimately our Board decision and the next Board meeting is slated for the first part of May.

Pam Kearney

Okay. Thank you. Onto Matt. What degree of concern do you have about future Tortoise portfolio company distribution cuts across Tortoise's midstream holding?

Matt Sallee

Sure. Obviously, that's something we're watching very closely right now. There have been quite a few cuts across the multi space, although fairly limited within the midstream part of the MLP space. As I'm sure our investors are very familiar with at this point, we do maintain a long-term strategy of high quality portfolio that's really anchored in investment grade long haul fee-based pipelines, so kind of with that as a backdrop the portfolio has seen no distribution cuts, speaking specifically to the midstream or MLP portfolios.

Recent growth as of – we're kind of in distribution announcement in the early part of earnings season. So this current quarter growth is just looking at our public holdings and what they've said publicly, you get to a weighted average growth of kind of north of 2% quarter-over-quarter, north of 8% annualized. So the growth in the portfolios remains really strong. Looking forward, we've right-sized positions where we see – potential risk to the current payout if prices don't recover, and we have fully exited a couple of positions, but I think at this point we feel pretty good with where the portfolio stand and great if commodity prices continue to recover.

Pam Kearney

Great. Thank you. Rob, would you touch on counterparty risk that Tortoise is exposed to and it's closed in some positions?

Rob Thummel

Sure. Matt talked a little bit about counterparty risk in his prepared remarks, but counterparty risk is obviously something that's very topical, especially in this environment of low oil prices and bankrupt oil and gas companies that everybody is reading about every day. We – our analyst team has spent a lot of time scouring SEC documents, 10-K, 10-Q, looking for customer concentration, looking for additional risk disclosures.

And ultimately where we've land is kind of back to at the high quality nature of the portfolio that the Matt mentioned and most of our companies that we invest and have lots of different customers, very diversified customer base. And the thing that is really important and when you're looking at the customer base is obvious their credit rating, but what portion of the value chain are they in, are they an upstream producer or are they actually a downstream consumer of the energy. And while these pipelines, their customers are the downstream refiners or utilities, and so a lot of those – there's really limited to know counterparty risk there.

The focus is just on the upstream side and really when we boil it all down, we've isolated that to essentially one company and it's – and that's Williams Companies and its exposure with Chesapeake Energy and that's been a popular name in the press lately, just because not bankrupt by any means and in fact it paid its most recent debt payment that was due in March. And so – and our exposure to Williams is very limited and in some of the funds that we have no exposure and then the other firms we have limited exposure.

So we feel pretty good actually about the analysis that we've done, looking at credit – counter credit – counterparty exposure and don't feel that that's going to be a huge headwind for us.

Pam Kearney

All right. Thank you. With that, operator, we'd be open to – having you open up the lines for the other listeners to have answer their questions.

Question-and-Answer Session



There are no questions at this time. At this point, I'd like to turn the call back over to Pam Kearney for closing comments.

Pam Kearney

All right. Well, we thank you for joining us today and we look forward to talking with you again. In the meantime, we invite you to check out Tortoise's quick take podcast series where members of the portfolio team share their views on timely energy events. For access and more information, please visit our website at and while you're there, be sure to check out the latest addition of our Tortoise stock market commentary piece.

With that have a great afternoon. Thank you


This concludes today's teleconference. Thank you for your participation. You may disconnect your lines at this time.

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