Market Overview

Duff & Phelps Select Energy MLP Fund Raises $485M In IPO


Virtus Investment Partners (NASDAQ: VRTS), which operates a multi-boutique asset management business, today announced that Duff & Phelps Select Energy MLP Fund Inc. (NYSE: DSE), a closed-end fund that is managed by Duff & Phelps Investment Management Co., raised $485 million in a common stock offering. Assuming full exercise of the underwriters' overallotment option, which may or may not occur, the fund will have raised approximately $555 million in gross proceeds. Its shares began trading today on the New York Stock Exchange under the symbol "DSE."

The fund seeks to provide shareholders with a high level of total return resulting from a combination of current tax-deferred distributions and capital appreciation by investing primarily in publicly traded master limited partnerships (MLPs) in the energy sector. Targeted investments include midstream MLPs across all market caps that specialize in the gathering, processing and transportation of natural gas, oil, refined products, or other energy sources. Under current market conditions, the fund intends to use financial leverage, which it anticipates will initially take the form of a credit facility.

"We believe the U.S. energy industry is in the early stages of a renaissance and expect the country will become a major energy exporter through the production of natural gas, crude oil, and natural gas liquids," said Nathan I. Partain, president and chief investment officer at Duff & Phelps Investment Management. "MLPs are capitalizing on the build-out of necessary infrastructure related to this resurgence in U.S. energy production, and we think significant infrastructure investment is likely to continue for a decade or more. DSE can give investors exposure to investments in MLPs, which have historically produced attractive risk-adjusted returns compared with traditional income-generating asset classes."

David D. Grumhaus, Jr., senior vice president of Duff & Phelps Investment Management, who has more than 21 years of investment industry experience, including the past 10 years as a portfolio manager of an energy- and utility-focused fund, is the lead portfolio manager and Charles J. Georgas, CFA, senior MLP analyst, who specializes in midstream energy MLPs, is the co-portfolio manager.

"This new fund leverages Duff & Phelps' long experience and proven leadership in utility and infrastructure investing to give investors the opportunity to benefit from the secular growth of the U.S. energy economy," said Barry Mandinach, executive vice president, and head of distribution at Virtus Investment Partners. "Duff & Phelps has more than 30 years of experience managing income-producing securities, and is highly respected for its consistent investment approach and stewardship of clients' assets."

The underwriting syndicate was led by Morgan Stanley & Co. LLC and Wells Fargo Securities, LLC.


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