No other factor seemed to explain the spread. Of the 18 MLPs in the high splits that had a publicly traded GP, five preceded their GP in going public, with two outperforming and three underperforming. This measures past success more than anything else, as GPs generally will only have an IPO if the LP has reached the high splits. For the 21 MLPs studied, most had been in the high splits for quite some time—some for nearly a decade. Regardless of how interesting that may be, the length of time an MLP has been in the 50% splits also didn’t predict its performance relative to the AMZX during this downturn.
Those investors who are now thinking about high-grading their portfolios (given the price of crude) by selling MLPs with a high splits GP tax aren’t really justified in doing so, as being in the 50/50 splits, in and of itself, hasn’t hurt an MLP in the current environment. Likewise, average outperformance of 2.6% is marginal enough to be inconclusive, especially given the dispersion of returns.