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Institutional Investor Advisor Individual Investor
Total AUM Avg. PM Years Experience Years Since Inception
$3.4B 23 7
As of March 31 2019

Strategy Average Annual Total Returns

(%, Gross of Fees)2
YTD 1 Year 3 Years 5 Years 7 Years Since Inception
ClearBridge Energy MLP Separate Account Composite 15.33 11.82 2.50 -5.37 0.58 1.10
Alerian MLP Index 16.82 15.11 5.69 -4.73 0.67 0.92
As of March 31 2019

Overview

The Energy MLP Strategy looks to leverage emerging opportunities in U.S. energy production through investment in Master Limited Partnerships.

Strategy Overview A strategy positioned for emerging opportunities created by recent shifts in U.S. energy production
Benchmark Alerian MLP Index
Total Strategy AUM $3.4B
Holdings Range 40-601
Objective High level of total return with an emphasis on cash distributions3

Investment Philosophy

Invest in companies with quality assets and those with the ability to grow and pay distributions.

Meet Our Managers

Michael Clarfeld, CFA

Portfolio Manager
19 Years experience
13 Years at ClearBridge

Chris Eades

Portfolio Manager
27 Years experience
12 Years at ClearBridge

Strategy Facts

The Strategy's MLP investments offer consistent income distributions and generate returns with a low historical correlation to traditional asset classes.

Energy infrastructure MLPs are well positioned to benefit over the long term from a resurgence in U.S. energy production.

Portfolio managers Chris Eades and Michael Clarfeld bring a long tenure of investment experience with expertise in energy and income-producing assets.

Literature & Perspectives

  • Midstream Valuation Discounts Shouldn’t Last
    Relative lower valuations, better growth and higher yields position midstream energy well over the balance of 2019.
  • Energy MLP Strategy Update
    1Q19 Update: PM Chris Eades discusses how there is still plenty of room to run in the recovery of energy MLP and midstream companies.
  • Energy MLP Strategy
    1Q19 Commentary:Energy MLP companies rebounded strongly in the first quarter, outperforming the broad U.S. equity market.
  • Energy MLP Strategy
    4Q18 Commentary: Our view remains that the disconnect between MLP stock prices and MLP cash flows will narrow over time.
  • Energy MLP Strategy
    3Q18 Commentary: MLP stocks have gained traction in the market since late March.

Investment Process

  • Define investment universe, targeting MLPs involved in transportation, storage and processing of crude oil, natural gas and refined products, with stable cash flows and low direct commodity exposure
  • Perform proprietary research that includes quantitative analysis of balance sheet, earnings modeling and valuation metrics and qualitative analysis of a company’s business mix, geographic footprint, management strength and growth opportunities
  • Construct portfolio with attention to position sizing and exposure to MLP sub-sectors with favorable growth outlooks
  • Continually review portfolio to analyze valuations, optimize exposures and manage risk

Performance

A focus on growing cash distributions has led to competitive long-term results.

Average Annual Total Returns (%, Gross of Fees)2

YTD 1 Year 3 Years 5 Years 7 Years Since Inception
ClearBridge Energy MLP Separate Account Composite 15.33 11.82 2.50 -5.37 0.58 1.10
Alerian MLP Index 16.82 15.11 5.69 -4.73 0.67 0.92

Characteristics

The Strategy features a concentrated, low turnover portfolio of approximately 35 holdings.

Sector Weights1,2

Representative Portfolio Alerian MLP Index
Diversified Energy Infrastructure 46.06 29.65
Liquids Transportation & Storage 27.18 38.51
Gathering/Processing 20.33 21.77
Natural Gas Transportation & Storage 2.61 3.56
Refining 2.57 2.99
Shipping 0.19 0.00
Cash 1.05 0.00
Portfolio Characteristics1,2
Characteristics Representative Portfolio Alerian MLP Index
P/E Ratio (trailing 12 mos.) 16.6 13.4
P/E Ratio (forward 12 mos.) 15.0 13.2
Price/Book 2.7 2.9
EPS Growth Next 3-5 Years (%) 8.0 7.1
Weighted Median Market Cap ($ bn) 13.8 13.8
Weighted Average Market Cap ($ bn) 23.6 18.5
ROE 16.3 19.2
Dividend Yield 7.0 7.8
Turnover (trailing 12 mos.) 1.9
Risk Statistics1
5 Year Risk Statistics Composite Alerian MLP Index
Annualized Returns (5 Years) -5.37 -4.73
Standard Deviation (%) 19.55 19.91
Sharpe Ratio -0.22 -0.18
Tracking Error (%) 2.80
R2 0.98
Alpha (%) -0.82
Beta 0.97
Top 10 Holdings1
Characteristics % of Total Representative Portfolio
Enterprise Products Partners LP 9.32
ONEOK Inc 8.44
Energy Transfer LP 7.07
Magellan Midstream Partners LP 5.47
Williams Cos Inc/The 5.39
Genesis Energy LP 5.16
Kinder Morgan Inc/DE 4.95
Enbridge Inc 4.51
Plains All American Pipeline LP 4.25
Tallgrass Energy LP 3.39
Total 57.95
Total Number of Holdings 33
  • 1

    Source: FactSet. Representative portfolio characteristics, holdings, sector weightings and market cap are based on a representative portfolio and are subject to change at any time. Holdings, sector weightings, market cap and portfolio characteristics of individual client portfolios may differ, sometimes significantly, from those shown. This information does not constitute, and should not be construed as, investment advice or recommendations with respect to the securities and sectors listed.

  • 2

    Past performance is no guarantee of future results. See GIPS endnotes. Performance is preliminary and subject to change.

  • 3

    There is no guarantee that the Strategy's objective will be met.

  • P/E ratios are weighted harmonic average. Price/Book is weighted average.

  • Performance source: Internal. Benchmark source: Alerian MLP ETF. Neither ClearBridge Investments, LLC nor its information providers are responsible for any damages or losses arising from any use of this information. 

  • Annualized Returns  1 Yr (12/31/18) 3 Yrs (12/31/18) 5 Yrs (12/31/18) Since Inception (12/31/18)
    Net-of-fees  -16.9% -4.5% -8.7% -1.8%
    Gross-of-fees  -16.2% -3.7% -7.8% -0.9%
    Alerian MLP Index -12.4% -1.1% -7.3% -1.3%
  • ClearBridge Investments, LLC claims compliance with the Global Investment Performance Standards (GIPS®). ClearBridge Investments, LLC ("ClearBridge") is a wholly owned subsidiary of Legg Mason, Inc. ("Legg Mason").  The investment advisory business now known as ClearBridge was registered in September 2005 to facilitate Legg Mason's acquisition of substantially all the equity asset management businesses known as Citigroup Asset Management. These former businesses serve as the foundation of ClearBridge and its claim of GIPS compliance for institutional accounts through predecessor firms, effective as of January 1997.  In June 2008, ClearBridge combined this business with its retail business to form a single GIPS firm. As of April 1, 2013 and January 1, 2016, ClearBridge's affiliates, Global Currents Investment Management, LLC, and ClearBridge, LLC, respectively, have become part of the ClearBridge GIPS firm. The ClearBridge Energy MLP Separate Account composite seeks to provide a high level of total return with an emphasis on cash distributions. The strategy will invest primarily in master limited partnerships (MLPs) in the energy sector.  Investments include investment in entities that provide economic exposure to MLPs. The strategy considers an entity to be within the energy sector if it derives at least 50% of its revenues from the business of exploring, developing, producing, gathering, transporting, processing, storing, refining, distributing, mining or marketing natural gas, natural gas liquids (including propane), crude oil, refined petroleum products or coal. Results are calculated in U.S. dollars. The Alerian MLP Index is a composite of the 50 most prominent energy Master Limited Partnerships (MLPs). To receive a complete list and description of ClearBridge composites and/or a presentation that adheres to the GIPS standards, please contact ClearBridge Institutional Marketing.