As the price of oil boomed, almost no bet seemed surer than master limited partnerships, which seemed to blend the growth appeal of the fracking revolution with the promise of high, relatively steady dividend-like yields. One sign of the buzz: 50 MLPs related to oil and gas went public between 2012 and last year. And then, the music stopped.
With oil down by half just since October, Wall Street is questioning the case for energy partnerships. As a group, last year's 14 IPOs ended the year little changed, having given back all of their 13 percent first-day trading gains, Renaissance Capital analyst Nick Einhorn said. Goldman Sachs' Theodore Durbin said the whole industry may need a different investment story: With investors skeptical that oil can deliver reliable growth, "the market is looking for alternatives to the traditional yield-plus-growth investment framework."