Tortoise Capital Advisors L.L.C.

Investor FAQs

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How often do you disclose your public company portfolio holdings? [ top ]

We disclose our top 10 portfolio holdings for TYG, TYY, TYN and TPZ on the first business day following the end of the calendar month through a press release.

We disclose our complete portfolio holdings for TYG, TYY, TYN, TTO and TPZ quarterly through filings with the SEC. Currently TTO information will be filed not later then 40 days following the end of each quarter on form 10-Q and 90 days following the end of the fiscal year on form 10-K. TYG, TYY, TYN and TPZ information will be filed no later than 60 days following the end of each quarter, and will be provided in quarterly and annual reports. We will also post it on this Web site.

What are the management fees for your funds? [ top ]

TYG: Management Fee 0.95%

TYY: Management Fee 0.95%

TYN: Management Fee 1.00%(1)

TTO: Management Fee 1.50%(2)

TPZ: Management Fee 0.95%(3)

Our management fees set forth above are annual rates that are applied to the fund's average monthly total assets (including any assets attributable to leverage) less accrued liabilities (other than deferred income taxes, debt entered into for purposes of leverage and the aggregate liquidation preference of outstanding preferred shares.) ("Managed Assets").

(1)The Advisor has agreed to a fee waiver of 0.10% of TYN's Managed Asset through Dec. 31, 2010 and 0.05% through Dec. 31, 2011.

(2)Through Dec. 31, 2009, the adviser has agreed to reimburse TTO for certain expenses in an amount equal to an annual rate of 0.25% of average monthly Managed Assets.

(3)The Advisor has agreed to a fee waiver of 0.15% of Managed Assets of TPZ for year 1, 0.10% for year 2 and 0.05% for year 3, effective as of the close of the offering.

What are Tortoise Capital Advisors' competitive advantages? [ top ]

We believe we are uniquely qualified and positioned to both identify MLP investment opportunities and to source and structure private investments in the sector.

MLP market expertise and industry relations - We believe our market expertise and our relationships enable us to capitalize on opportunities to source investments in MLPs that may not be readily available to other investors. Such investment opportunities may include purchasing larger blocks of limited partner interests - often at discounts to market prices, non-controlling general partner interests and/or positions in companies expected to form an MLP. We also believe our MLP market expertise helps us recognize long-term industry trends and to identify differences in value among individual MLPs.

Ability to trade efficiently in a relatively illiquid market - We believe our ability to generate favorable returns on MLP investments is aided by our trading experience. We manage our own trading desk, and understand day-to-day market conditions for MLP securities, which have been historically characterized by lower daily trading volumes than comparable corporate equities. equities.

What are your public companies investment policies? [ top ]

TYG under normal circumstances will invest at least 90% of total assets (including assets obtained through leverage) in securities of energy infrastructure companies and invest at least 70% of our total assets in equity securities of MLPs. TYG may invest up to 30% of total assets in restricted securities, all of which may be illiquid, primarily through direct placements. The types of restricted securities that we may purchase consist of MLP convertible subordinated units, MLP common units and securities of private energy infrastructure companies (i.e., non-MLPs). Investments in private companies with no publicly traded shares or units are limited to 5% of total assets. TYG may invest up to 25% of total assets in debt securities of energy infrastructure companies, including securities rated below investment grade (commonly referred to as junk bonds). Below investment grade debt securities will be rated at least B3 by Moody's Investors Service, Inc. and at least B- by Standard & Poor's Ratings Group at the time of purchase, or comparably rated by another statistical rating organization or if unrated, determined to be of comparable quality by the Adviser. TYG will not invest more than 10% of total assets in any single issuer (applies at time of purchase; not required to reduce position due solely to market fluctuations). TYG will not engage in short sales.

TYY under normal circumstances will invest at least 80% of net assets (including assets obtained through leverage) in equity securities of energy companies and invest at least 80% of our total assets in equity securities of MLPs and their affiliates in the energy infrastructure sector. TYY may invest up to 50% of total assets in restricted securities, all of which may be illiquid. The types of restricted securities that we may purchase consist of MLP convertible subordinated units, MLP common units and securities of private energy infrastructure companies (i.e., non-MLPs). TYY may invest up to 20% of total assets in debt securities, including securities rated below investment grade (commonly referred to as junk bonds). TYY will not invest more than 15% of total assets in any single issuer (applies at time of purchase; not required to reduce position due solely to market fluctuations). TYY will not engage in short sales.

TYN under normal conditions: will invest at least 80% of total assets (including assets obtained through leverage) in equity securities of North American energy companies, will typically invest at least 50% of total assets in the equity securities of RITs in order to pass along the benefits of the foreign tax credit to stockholders, may invest up to 25% of total assets in equity securities of publicly-traded MLPs, and may invest up to 50% of total assets in restricted securities. TYN will not engage in short sales.

TTO under normal circumstances: will invest at least 90 percent of total assets (including assets obtained through leverage) in energy infrastructure company securities, will invest at least 70% of total assets in qualifying assets including securities purchased in non-public offerings from eligible portfolio companies, may invest up to 30% of total asset in non-qualifying assets including high yield bonds, bridge loans, distresses debt, commercial loans, private equity, securities of public companies or secondary market purchases of securities of target portfolio companies.

TPZ under normal circumstances: will invest at least 80% of total assets (including assets obtained through leverage) in securities of companies that derive more than 50% of their revenue from power and energy infrastructure operations, will invest a minimum of 60% of our total assets in fixed income securities, will not employ leverage above 20% of our total assets at time of incurrence, will not invest more than 25% of our total assets in non-investment grade rated fixed income securities; will not invest more than 15% of our total assets in restricted securities that are ineligible for resale; may invest up to 10% of our total assets in securities issued by non-U.S. issuers, will not engage in short sales.

Why should investors consider energy infrastructure MLPs? [ top ]

We believe energy infrastructure MLPs offer an opportunity for attractive risk-adjusted returns:

MLPs provide steady distributions with attractive growth profiles. Publicly-traded energy infrastructure MLPs generally distribute most of their available cash to unitholders. As these partnerships grow their earnings through acquisitions and operational expansions, distributions should continue to increase.

Over the past several years many of the major oil companies have divested themselves of midstream energy assets, providing an opportunity for MLPs to acquire these assets at attractive valuations. We believe that this trend will continue and that current market conditions are conducive for continued growth in distributions. However, there can be no assurance that these levels will be maintained in the future.

MLPs operate strategically important assets that typically generate stable cash flows. MLPs operate in businesses that are necessary for providing consumers with access to energy resources. We believe that due to the fee-based nature and long-term importance of their midstream energy assets, MLPs typically generate stable cash flows throughout economic cycles. Additionally, certain businesses operated by MLPs are regulated by federal and state authorities that ensure MLPs can charge fair rates.

The midstream energy sector has high barriers to entry. Due to the high cost of constructing midstream energy assets and the difficulty of developing the expertise necessary to comply with the regulations governing the operation of such assets, the barriers to entering the midstream energy sector are high. MLPs with large asset bases and significant operations enjoy a competitive advantage over others seeking to enter the sector.

A limited institutional and retail MLP investor base creates market inefficiencies and opportunities. Because MLPs generate unrelated business taxable income (UBTI), they are typically not held by tax-exempt investors such as pension plans, endowments, employee benefit plans or individual retirement accounts.

Also, income and gains from MLPs are subject to the Foreign Investment in Real Property Tax Act (FIRPTA), limiting the investment by non-U.S. investors in the sector. As a result, MLPs are held predominantly by taxable U.S. retail investors. Further, due to the limited public market float for MLP common units and tax-reporting burdens and complexities associated with MLP investments, MLPs appeal to a small but growing segment of retail investors.