Goldman Sachs Asset Management is seeking to exploit the boom in US shale energy through a new fund.
The Goldman Sachs North American Shale Revolution & Energy Infrastructure Portfolio will invest primarily in master limited partnerships (MLPs).
This is a publicly traded US corporate structure that receives favourable tax treatment, focused on the midstream energy industry.
These midstream companies lie between energy producers and consumers, such as refiners, and are typically the infrastructure operators that run oil and gas pipelines.
Goldman Sachs argued that such businesses offer ‘lower commodity price risk than energy producers and users, and can also offer what we believe are attractive attributes: income and growth potential, interest rate and inflation resiliency, and low correlations to traditional asset classes’.
The fund will be benchmarked against a composite of 50% in the Alerian MLP index and 50% in the Energy Select Sector index.
It will be managed by a team led by Kyri Loupis, who already runs the closed-ended Goldman Sachs MLP Income Opportunities fund in the US. This raised almost £500 million ($840 million) when it floated in November last year.
The North American Shale Revolution & Energy Infrastructure fund will have a management fee of 1.75% on retail share classes, with a minimum initial investment of $5,000 (£2,970), or 0.75% on institutional share classes.