When Kinder Morgan made the decision to
Kinder Morgan was the poster child for the boom in energy MLPs and the emergence of a new era in U.S. energy infrastructure.
It went public in a private equity-backed IPO in 2011, then went on a buying spree that including the acquisition of El Paso for $38 billion, becoming one of the largest midstream — oil and gas pipeline — players in North America. In August 2014, all of its various entities were combined in a $70 billion transaction, a deal under which it abandoned the MLP structure, a decision that shocked some energy industry watchers, given how closely it was associated with the concept.
Assets under management in MLPs in 2007 were $100 billion; by 2014 that had quintupled to $500 billion.
But the stock plummets this year in MLPs — including a 60 percent dive for Kinder Morgan, which has brought its market cap down to $35 billion — culminated in Kinder Morgan's dividend slashing and show that some of the arguments used to sell investors on MLPs were more myth than reality.