The balance between supply and demand of MLP paper has always been delicate. In the past, it was a balance between perpetually growing inflows and equity issuance. There were times when equity offerings temporarily overwhelmed investor appetite for MLPs. But as liquidity has diminished in recent years, the structural risks to this group to a stampede to the exits grew larger.
Thin and Getting Thinner, With a Long Tail
A few years ago, we raised concerns over how concentrated MLPs had become at the top, in a paper and blog post that referenced the "Elephants