Antero Midstream GP’s public offering
Antero Midstream GP (AMGP) recently completed its IPO (initial public offering). AMGP gives investors a second option to invest in the high-distribution-growth Antero Midstream Partners (AM). AMGP holds the non-economic GP interest and IDRs (incentive distribution rights) in AM. IDRs entitle AMGP a higher share of incremental distributions. We’ll look into AM’s distribution targets in the next part of this series.
Antero Midstream GP’s market performance
Antero Midstream GP was listed at a 5.7% discount to its offer price of $23.5 per unit. It hasn’t entered into positive territory since its listing. The stock saw its lows of $20.9 per unit in mid-May. However, it has recovered slightly since then. AMGP is currently trading 2.4% and 6.5% below the listing price and offering price. At the same time, the Alerian MLP ETF (AMLP) has lost 2.3% while Antero Midstream Partners has gained 1.5%.
K1 versus 1099
Antero Midstream GP has opted to be taxed as a C-corp. This setup offers an advantage for investors looking to be part of Antero Midstream’s growth story while avoiding the cumbersome K-1 filing process. However, Antero Midstream GP is riskier than Antero Midstream due to its dependence upon AM for distribution income. Plains GP Holdings (PAGP), EnLink Midstream LLC (ENLC), and Cheniere Energy Partners LP Holdings (CQH) are among the GPs taxed as C-corps.