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December 31, 2014
Firm Overview
CastleArk Philosophy - The Importance of Distribution Growth
CastleArk Management, LLC is an
employee-owned, registered investment adviser founded in 1999. Based
in Chicago, CastleArk currently has
five major product offerings: Large
Cap
Growth,
Small
Company
Growth, Global Energy, Small/Mid
Cap Growth and Master Limited
Partnerships.
Portfolio Managers
• Jerome A. Castellini
President & Chief Investment Officer
Years of Experience:
36
Growth in distributions drives superior returns for MLPs, not yield. The benefits of an MLP
portfolio focused on growth over yield include the following:
• Increasing value supported by higher dividends,
• Less volatility and greater downside protection,
• Better inflation protection.
The CastleArk Advantage
• Proven institutional money manager with a long-term record of successful growth
investing.
• Over 50 combined years of investing experience within the Energy sector.
• Since inception, CastleArk ranks among the top quartile of MLP managers on both an
absolute and risk-adjusted basis.
• Joseph Hagan, CFA, CPA
Years of Experience:
9
Gross Returns vs. MLP Style* for Periods Ended December 31, 2014
25.0
Objective
22.5
To maximize total return by investing
in high-quality MLPs with peerleading distribution growth.
20.0
A (20)
A (21)
B (96)
B (96)
A (10)
17.5
15.0
12.5
10.0
Portfolio Characteristics (millions)
CastleArk
MLP
Alerian
MLP
Index
34
50
Median Market
Capitalization
$ 9,200
$ 3,900
Average Market
Capitalization
$ 23,300
$ 22,100
December 31, 2014
# of Holdings
7.5
5.0
B (96)
2.5
Last Year
Last 3 Years
Since Inception 1/1/11
Annualized
CastleArk MLP
Alerian MLP Index
A
B
19.62
4.81
21.68
11.90
21.69
12.40
Up-Market / Down-Market Capture CastleArk MLP Since Inception as of December 31, 2014
110.0%
Top Ten Holdings (% of Portfolio)
100.0%
Enterprise Products Partners LP
10.0%
Magellan Midstream Partners LP
8.6%
Energy Transfer Partners LP
8.0%
MarkWest Energy Partners LP
6.5%
Kinder Morgan Inc.
5.0%
Plains All Amer Pipeline LP
4.5%
Shell Midstream Partners LP
4.1%
40.0%
Western Gas Equity Partners LP
3.4%
30.0%
Energy Transfer Equity LP
3.3%
Sunoco Logistics Partners LP
3.2%
Down Market Capture
MLP FACT SHEET
Master Limited Partnership (MLP)
Alerian MLP Index
90.0%
80.0%
MLP Style Group
70.0%
60.0%
50.0%
80.0%
CastleArk:MLP
100.0%
120.0%
140.0%
160.0%
Up Market Capture
* MLP Style: Major Consulting Database
Benchmark: Alerian MLP Index
For Institutional Investors Only
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December 31, 2014
Investment Terms &
Index Definitions
MLP Style* Risk-Adjusted Returns as of December 31, 2014
12.0
Alpha measures a fund’s risk-adjusted
performance
and
represents
the
difference between a fund’s actual
performance
and
its
expected
performance, given its level of risk as
measured by beta.
10.0
6.0
Information Ratio measures a fund’s
risk-adjusted
performance
and
represents the ratio of the fund’s active
return, defined as the difference between
the return of the fund and the return of
the selected benchmark index, divided by
the tracking error, defined as the
standard deviation of the active return.
(2.0)
Information Ratio
Alpha
CastleArk MLP
A
9.47
2.07
* MLP Style: Major Consulting Database
Sector Weighting as of December 31, 2014
23.1%
30%
19.7%
25.2%
40%
23.9%
50%
3.7%
0.0%
5.7%
0.5%
2.4%
0.0%
2.9%
0.0%
0.6%
0%
Large
Diversified
Coal
Exploration Gathering &
Liquids
Natural Gas Oil Service Propane &
& Production Processing Transport & Pipelines
Gas Storage
Storage
CastleArk MLP
Contact
0.0%
6.2%
3.3%
10%
2.6%
20%
0.5%
Master Limited Partnership (MLP) is a
partnership that is publicly traded. It
combines the tax benefits of a limited
partnership with the liquidity of publiclytraded securities.
0.0
1.1%
Alerian MLP Index is a float-adjusted,
capitalization-weighted composite of the
50 most prominent MLPs.
A (26)
2.0
0.0%
Down-Market Capture measures how
well and investment manager performed
relative to an index during periods when
that index has fallen. Values below 100
indicate outperformance of the index in
down-markets. Values above 100
indicate underperformance in downmarkets.
4.0
43.1%
Up-Market Capture measures how well
an investment manager performed
relative to an index during periods when
that index has risen. Values above 100
indicate outperformance of the index in
up-markets. Values below 100 indicate
underperformance in up-markets.
A (16)
8.0
35.5%
MLP FACT SHEET
Master Limited Partnership (MLP)
Tankers
Other
Cash
Alerian MLP Index
Total Return as of December 31, 2014 (Net of Fees)
CastleArk Management, LLC
Annualized
1 North Wacker Drive, Suite 3950
4Q2014
Chicago, IL 60606
CastleArk MLP (NET)
Phone: 312.456.9682
For inquiries: [email protected]
Alerian MLP Index
YTD
1 Year
2 Year
3 Year
Since
Inception*
-5.45%
18.57%
18.57%
26.72%
20.61%
20.64%
-12.28%
4.81%
4.81%
15.63%
11.90%
12.40%
*Inception Date: 01/01/11
Past performance is not indicative of future results
CastleArk MLP Composite Annual Disclosure Presentation
Year End
2014
2013
2012
2011
Total
Firm
Assets
(millions)
4,333
3,876
3,060
2,825
Composite Assets
US Dollars
(millions)
143
115
70
64
Number of
Accounts
Five or Fewer
Five or Fewer
Five or Fewer
Five or Fewer
3- year Annualized
Standard Deviation
Annual Performance results
Composite
Gross
19.62%
36.64%
10.23%
21.72%
Net
18.57%
35.43%
9.25%
20.71%
Alerian MLP
Index
4.81%
27.75%
4.92%
14.02%
Composite
Dispersion
0.06
0.02
N/A
N/A
Composite
12.71%
12.44%
Alerian MLP
Index
13.54%
13.43%
N.A. - Information is not statistically meaningful due to an insufficient number of portfolios in the composite for the entire year.
CastleArk MLP Composite consists of fully discretionary accounts that invest in the energy master limited partnership (MLPs) whose businesses focus on oil and natural gas development. For comparison purposes the composite is measured against the Alerian MLP
Index. The minimum account size for this composite is $5 million.
CastleArk Management, L.L.C. has prepared and presented this report in compliance with the Global Investment Performance Standards (GIPS®).
CastleArk Management, L.L.C. is registered as an investment advisor with the Securities and Exchange Commission under the Investment Advisers Act of 1940. The firm maintains a complete list and description of composites, which is available upon request.
Results are based on fully discretionary accounts under management, including those accounts no longer with the firm. Past performance is not indicative of future results.
The U.S. Dollar is the currency used to express performance. Returns are presented gross and net of management fees and include the reinvestment of all income. Net of fee performance was calculated using actual management fees. Policies for valuing portfolios,
calculating performance, and preparing compliant presentations are available upon request. The annual composite dispersion is an asset-weighted standard deviation calculated for the accounts in the composite the entire year. The three-year annualized standard
deviation measures the variability of the composite and the benchmark returns over the preceding 36-month period.
The MLP Composite was created January 1, 2011.
Investment management fees for the accounts in the composite range between 1.00% and 1.25%. Actual investment advisory fees incurred by clients may vary
Use of Performance Data:
Past performance should not be construed as a guarantee of future performance. The information provided in this presentation should not be construed as a recommendation to purchase or sell any particular security or an assurance that any
particular security held in a portfolio will remain in the portfolio or that a previously held security will not be repurchased. Securities discussed in this presentation may not represent a portfolio's entire holdings. It should not be assumed that any of
the security transactions or holdings discussed have been or will prove to be profitable or that future investment decisions will be profitable or will equal or exceed the investment performance of the securities discussed.
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