ClearBridge Energy MLP Fund has raised approximately USD1.268bn in its common stock offering, assuming full exercise of the underwriters’ overallotment option.
Its shares have begun trading today on the New York Stock Exchange under the symbol CEM.
The fund’s investment objective is to provide a high level of total return with an emphasis on cash distributions.
The fund seeks to achieve its objective by investing primarily in master limited partnerships in the energy sector. The fund considers MLPs to be in the energy sector if they derive at least 50 per cent of their revenues from the businesses 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.
When a company is organised as a MLP, it benefits from a structure that combines the tax benefits associated with limited partnerships with the liquidity of publicly traded securities.
"This innovative fund structure should provide investors with an efficient way to invest in an asset class that has historically provided steady cash flows with tax advantages. Furthermore, we believe that CEM could provide a potential hedge in a rising interest rate environment," says Matt Schiffman, head of Americas retail for Legg Mason.
ClearBridge Energy MLP Fund is a newly organised, non-diversified, closed-end management investment company which is advised by Legg Mason Partners Fund Advisor and sub-advised by ClearBridge Advisors, both of which are wholly owned subsidiaries of Legg Mason.
The underwriting syndicate was led by Citigroup Global Markets, Morgan Stanley, Merrill Lynch, Pierce, Fenner & Smith and Ameriprise Financial Services.
