2015 All-America Research Team: Master Limited Partnerships, No. 2: Richard Gross II & team
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2015 All-America Research Team: Master Limited Partnerships, No. 2: Richard Gross II & team

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Winning the No. 2 position for a second year running is the Barclays squad under the direction of Richard Gross II, who also claims a runner-up position on the Natural Gas lineup.

< The 2015 All-America Research Team

2015-10-tom-johnson-res-all-america-research-team-richard-gross-ii.jpg

Richard Gross II & team

Barclays

First-place appearances: 1


Total appearances: 7


Team debut: 2009


Winning the No. 2 position for a second year running is the Barclays squad under the direction of Richard Gross II, who also claims a runner-up position on the Natural Gas lineup. “Rick has been doing this as long as anyone — and it’s obvious when you talk to him that his knowledge of industry drivers that will shape investment decisions is shaped by this,” observes one buy-side enthusiast. Gross works out of Granby, Colorado, and the other members of his seven-person team are based in Dallas, New York and San Francisco. They cite “a plain-vanilla energy cycle” for precipitating master limited partnerships’ underperformance so far this year. As of mid-September, the S&P MLP Index trailed the broad market by 33.3 percentage points, having shed 35.9 percent. With a slowdown in volumes expected in 2016 and growth in question, they anticipate that investors will be attracted by defensive characteristics over the next 12 months. One group the analysts urge clients to favor is “large-cap, investment-grade names with strong distribution coverage and below-average capital intensity,” advises Gross, 65. Examples include three of the nation’s dominant midstream providers: Energy Transfer Partners of Dallas; Houston-based Enterprise Products Partners; and Tulsa, Oklahoma’s Magellan Midstream Partners. Additional opportunities can be found in “high quality, large-scale, energy-price-sensitive franchise general partners,” such as Tulsa-based Oneok and Targa Resources Corp. of Houston, he says, because they “provide an appealing risk-reward for those expecting a moderate to strong recovery in oil prices.”



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