The Global X research team has created a piece on the General Partners of MLPs, explaining who they are, how they are compensated, and where they stand in the current low energy price environment.
Read the full piece here
Who are the General Partners?
A General Partner is compensated for its management efforts through incentive distribution rights (IDRs), which are a form of carried interest. The structure of IDRs incentivizes a GP to increase the MLP’s distributions to its common unit holders. As the General Partner raises the nominal amount of distributions made by the MLP to predetermined thresholds, the GP receives an increasing percentage of the distribution.
Global X offers MLPX, a tax efficient ETF that invests <25% of its assets in midstream MLPs, and the remainder in midstream General Partners and energy infrastructure corporations.
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