Kayne Anderson Fund Advisors

KED - Energy Development Company

KED - Fact Sheet

Fact Sheet

Overview
as of 8/31/14
Symbol
KED
Exchange
NYSE
CUSIP
48660Q102 
Inception Date
9/21/2006
NAV updates
Quarterly1
Net Asset Value (NAV)
$38.62
Leverage
Total Assets
$644 million
Leverage
$105 million
Quarterly Distribution2 ($/share)
$0.52
 

 

Objective

KED is a closed-end fund that invests principally in debt and equity securities of privately-held energy-related master limited partnerships (MLPs), publicly-traded MLPs, and other energy companies. KED's objective is to generate both current income and capital appreciation for its shareholders. MLPs are publicly traded limited partnerships. Energy-related MLPs own domestic infrastructure assets that are used in the gathering, processing, transportation, storage, refining and distribution of energy-related commodities.

Investment Merits
MLP Sector Opportunity

- MLPs provide steady distributions with attractive growth profiles. MLPs are expanding their asset bases to meet growing needs for energy infrastructure in the U.S.

Attractive Fund Structure

- KED issues a Form 1099 (as opposed to K-1s issued by MLPs).
-Suitable for IRAs, foundations and tax-exempt accounts, because unlike direct holdings in MLPs, KED does not generate unrelated business taxable income (UBTI).

Access to Private Investments

- Provides access to private investment opportunities not available to retail investors.
- Kayne Anderson pioneered the private MLP market and is the leading investment firm originating and structuring private MLPs.

Portfolio
as of 8/31/14
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Top 10 Holdings
as of 8/31/14
Regency Energy Partners LP
8.4%
Emerge Energy Services LP
7.4%
Energy Transfer Partners, L.P.
6.5%
Williams Partners L.P.
5.8%
Enterprise Products Partners L.P.
5.1%
MarkWest Energy Partners, L.P.
4.8%
VantaCore Partners LP*
4.7%
Plains GP Holdings, L.P.
4.4%
DCP Midstream Partners, LP
4.3%
ONEOK Partners, L.P.
4.1%
55.5%

*On October 1, 2014, VantaCore Partners LP ("VantaCore"), KED's last remaining private portfolio company, closed the previously announced merger with a subsidiary of Natural Resource Partners L.P. (NYSE:NRP). As a result of this transaction, KED no longer has any private portfolio companies.

For the full portfolio, please see the Schedule of Investments in our most recent quarterly or annual report

Quarterly Distributions per Share
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View the complete Distribution History for KED.

Information on Tax Character of Distributions

Our distributions are treated as a taxable dividend (qualified dividends) to our common stockholders to the extent of our current and accumulated earnings and profits. If the distribution exceeds our current or accumulated earnings and profits, the distribution will be treated as a return of capital to our common stockholders to the extent of each stockholder’s basis in our common stock, and then the amount of a distribution in excess of such stockholder’s basis would be taxed as capital gain. Common stockholders will receive a Form 1099 from us and will recognize dividend income only to the extent of our current and accumulated earnings and profits. Because the cash distributions received from the MLPs in our portfolio are expected to exceed the earnings and profits associated with owning such MLPs, a portion of our distributions may be paid from sources other than our current and accumulated earnings and profits. The table below summarizes the tax character of our distributions since inception.

Year Ordinary
dividends
Qualified
dividends
Capital gains
distrib.
  Nondividend
distrib.
(Return of Capital)
  Total
2006 100% - -   -   100%
2007   74% - 10%     16%   100%
2008 - - -   100%   100%
2009 - - -   100%   100%
2010 -   42% -     58%   100%
2011 - 100% -   -   100%
2012 - 100% -   -   100%
2013 - 100% -   -   100%
2014E4 - 100%     -    100%

Sample Form 1099-DIV for each year can be found at Tax Information.

Total Return (NAV plus distributions)
9/21/06 to 8/31/14
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Share Price and NAV History1
9/21/06 to 8/31/14
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Premium/Discount to NAV1
9/21/06 to 8/31/14
[image]
Fiscal Year Returns1
as of 8/31/14
 
2007
2008
2009
2010
2011
2012 
2013 
2014 YTD 
NAV and distrib3
5.1%
-27.0%
14.4%
34.3%
20.3%
10.5% 
35.1% 
35.6% 
NAV only
-0.3%
-32.8%
3.0%
24.0%
11.9%
3.2% 
26.2% 
28.9% 
Share price and distrib3
9.3%
-54.8%
56.1%
45.8%
19.3%
37.8% 
18.1% 
38.5% 
Share price only
3.7%
-58.4%
40.5%
34.6%
11.0%
28.7% 
10.3% 
31.6% 
Returns (Not annualized)
as of 8/31/14
 
3 Mo.
6 Mo.
1-Yr
2-Yr
3-Yr
5-Yr
Since Inception
NAV and distributions3
13.7%
28.5%
48.3%
84.9%
115.6%
246.8% 
195.8%
NAV only
12.0%
24.5%
38.7%
61.6%
75.5%
141.1% 
65.6%
Share price and distributions3
11.8%
27.7%
48.0%
66.6%
126.2%
366.9% 
169.9%
Share price only
10.1%
23.7%
38.4%
45.5%
84.1%
224.6% 
51.1%
Growth of Hypothetical $10,000 Investment
Date
NAV and Distrib
Share Price
and Distrib
Inception (9/21/06)
$10,000
 $10,000
11/30/06
10,304
8,928
11/30/07
10,830
9,761
11/30/08
7,910
4,414
11/30/09
9,048
6,888
11/30/10
12,151
10,039
11/30/11
14,618
11,976
11/30/12
16,151
16,506
11/30/13
  21,817
19,495
  8/31/14
29,581
  26,993

 

KED's fiscal year ends 11/30.

This table illustrates the growth of a hypothetical $10,000 investment in the fund's common shares beginning on the inception date with all distributions reinvested through the Dividend Reinvestment Program (DRIP). Ending values as of the dates shown in the table. Performance does not reflect transaction fees or broker commissions. Past performance is no guarantee of future results.

1) KED's fiscal year ends 11/30. NAV is published quarterly for the following dates - 2/28 (or 2/29), 5/31, 8/31, and 11/30. Adjusted NAV is published on a monthly basis for those months that do not constitute the end of a fiscal quarter. (For details, see www.kaynefunds.com/ked/net-asset-value).Share prices are available daily.
2) Payable on 10/24/14 (ex-date 10/15/14) for the quarter ended 8/31/14.
3) Assumes that distributions have been reinvested through the Dividend Reinvestment Program (DRIP).
4) This estimate is based on our estimated earnings and profits for fiscal 2014, which includes actual results for the first nine months of the fiscal year and does not include a projection for any gains or losses on the sale of securities during the last three months of fiscal 2014. The final determination of the tax character of our distributions will be made after our fiscal year-end when we can determine our actual earnings and profits for the full year. The final tax status of our distributions is dependent on our earnings and profits (including gains and losses on the sale of securities) for the remainder of our fiscal year end and may differ substantially from this preliminary information.

This material shall not constitute an offer to sell or a solicitation to buy, nor shall there be any sale of the securities in any jurisdiction in which such offer or sale is not permitted. Past performance is not a guarantee of future results. An investment in the fund could suffer loss. Current performance may be lower or higher than that shown based on market fluctuations from the end of the reported period. Before making an investment in the fund, you should consider the investment objective, risks, charges and expenses of the fund, which, together with and other important information are included in the fund's most recent prospectus and other filings with the SEC. There can be no assurance that the fund's investment objectives will be attained. Shares of closed-end funds frequently trade at a market price that is below their net asset value. Leverage creates risks which may adversely affect return, including the likelihood of greater volatility of net asset value and market price of common shares, and fluctuations in dividend rates on any preferred shares.

NOT FDIC INSURED
NOT BANK GUARANTEED
MAY LOSE VALUE

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