Hennessy Acquires the BP Capital TwinLine Energy and MLP Funds

With the acquisition of the BP Capital TwinLine Funds, Hennessy now offers a suite of complementary energy-related funds.

October 29, 2018 - Hennessy Advisors, Inc., the investment manager of the Hennessy Funds, announced that it has completed the acquisition of assets related to the management of the BP Capital TwinLine Energy Fund and the BP Capital TwinLine MLP Fund. Hennessy Advisors is now the investment advisor of the Funds, and BP Capital is now the sub-advisor to the Funds, meaning that the same Portfolio Managers who managed the portfolios in the past will continue to manage the portfolios going forward.

The Funds have been renamed and mapped as follows:

- BP Capital TwinLine Energy Fund Class A (BPEAX ) ---> Hennessy BP Energy Fund Investor Class (HNRGX)

- BP Capital TwinLine Energy Fund Class I (BPEIX ) ---> Hennessy BP Energy Fund Institutional Class (HNRIX)

- BP Capital TwinLine MLP Fund Class A (BPMAX) ---> Hennessy BP Midstream Fund Investor Class (HMSFX)

- BP Capital TwinLine MLP Fund Class I (BPMIX) ---> Hennessy BP Midstream Fund Institutional Class shares (HMSIX)

Toby Loftin, Managing Principal of BP Capital Fund Advisors noted, “Neil Hennessy, Terry Nilsen, and the team at Hennessy Advisors consistently demonstrate a commitment to the mutual fund business and to their shareholders.  We are excited to join the Hennessy team, and we feel confident our shareholders will continue to receive both solid portfolio management and excellent shareholder service."

Neil Hennessy, Chairman, and CEO of Hennessy Advisors, Inc. and President and Chief Investment Officer of Hennessy Funds added, "With the addition of these two funds, inspired by legendary energy investor T. Boone Pickens, Hennessy will now offer a suite of complementary energy-related mutual funds. We want to thank the shareholders of the BP Capital TwinLine Funds for their vote of confidence, and we are excited to welcome them into the Hennessy family of Fund."

The transaction has been structured with the intention that it qualifies, for federal income tax purposes, as a tax-free reorganization under the Internal Revenue Code of 1986, as amended.  Therefore, shareholders of the Funds should not recognize any gain or loss for federal income tax purposes as a result of the transaction.


For additional information, please read the Frequently Asked Questions Regarding the Acquisition of the BP Capital TwinLine Funds.

The tax information provided is not exhaustive. Investors must consult their tax advisor for advice and information concerning their particular situation. Neither the Funds nor any of its representatives may give tax advice.

References to other investment products should not be interpreted as an offer of these securities.

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Neither forward earnings nor earnings growth is a measure of a fund’s future performance.

Mutual fund investing involves risk. Principal loss is possible. Current and future holdings are subject to risk. Small and medium-sized companies may have more limited liquidity and greater price volatility than larger companies. Investments in foreign securities may involve political, economic, and currency risks, greater volatility, and differences in accounting methods. The Focus, Total Return, Balanced, Large Cap Financial, Small Cap Financial, and Midstream Funds are considered non-diversified funds. A non-diversified fund, which may concentrate its assets in fewer individual holdings than a diversified fund, is more exposed to individual stock volatility than a diversified fund. A fund that concentrates its investments within one country, one sector, or a small group of industries, such as Japan, Technology, Financials, or Energy, may be subject to a higher degree of market risk. Investments in debt securities typically decrease in value when interest rates rise. The risk is greater for longer-term debt securities. Investments in lower-rated and non-rated securities present a greater risk of loss to principal and interest than higher-rated securities. Mortgage- and asset-backed securities are subject to prepayment risk, which is the risk that the borrower will prepay some or all of the principal owed to the issuer. Funds that invest in pooled investment vehicles (including ETFs) may experience higher fees. The formula-based strategy employed by some Funds may cause those Funds to buy or sell securities at times when it may not be advantageous.

ETFs are subject to additional risks that do not apply to conventional mutual funds, including the risks that the market price of an ETF’s shares may trade at a premium or discount to its net asset value, an active secondary trading market may not develop or be maintained, or trading may be halted by the exchange in which they trade, which may impact a Fund’s ability to sell its shares. Shares of any ETF are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. Brokerage commissions will reduce returns.

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Master Limited Partnerships (MLPs) and MLP investments have unique characteristics. A Fund does not receive the same tax benefits as a direct investment in an MLP.

The prices of MLP units may fluctuate abruptly and trading volume may be low, making it difficult for a Fund to sell its units at a favorable price. MLP general partners have the power to take actions that adversely affect the interests of unit holders. Most MLPs do not pay U.S. federal income tax at the partnership level, but an adverse change in tax laws could result in MLPs being treated as corporations for federal income tax purposes, which could reduce or eliminate distributions paid by MLPs to the Fund. If the Energy Transition Fund’s MLP investments exceed 25% of its assets, it may not qualify for treatment as a regulated investment company (“RIC”) under the Internal Revenue Code (“Code”), and the Fund would be taxed as an ordinary corporation, which could substantially reduce its net assets and its distributions to shareholders. The Midstream Fund is treated as a regular corporation, or “C” corporation, for U.S. federal income tax purposes, and therefore, is subject to U.S. federal income tax on its taxable income at the graduated rates applicable to corporations (currently a maximum rate of 21%) as well as state and local income taxes. The Midstream Fund will not benefit from current favorable federal income tax rates on long-term capital gains, and Fund income and losses will not be passed on to shareholders. The Midstream Fund accrues deferred income taxes for future tax liabilities associated with the portion of MLP distributions considered to be a tax-deferred return of capital and for any net operating gains as well as capital appreciation of its investments. This deferred tax liability is reflected in the daily NAV, and as a result, the Fund’s after-tax performance could differ significantly from the underlying assets even if the pre-tax performance is closely tracked.

Glossary of Terms contains definitions and additional information.

To view the top 10 holdings of a Fund, please click the Fund name: Cornerstone Growth, Focus, Cornerstone Mid Cap 30, Cornerstone Large Growth, Cornerstone Value, Total Return, Equity and Income, Balanced, Energy Transition, Midstream, Gas Utility, Japan, Japan Small Cap, Large Cap Financial, Small Cap Financial, Technology. Fund holdings are subject to change and not recommendations to buy or sell any security.

Opinions expressed are subject to change at any time, are not guaranteed, and should not be considered investment advice.

News and Media Page:

To view the Morningstar ratings for the Japan Fund, please click here. (Media - TD Ameritrade)

To view the Morningstar ratings for the Focus Fund, please click here. (Media - CNBC-B. Macualey).

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Tom White is a TD Ameritrade Network contributor and is not affiliated with the Hennessy Funds. Content is not investment advice, or a recommendation of any security, strategy, or account type. Options involve risks and are not suitable for all investors as the special risks inherent to options trading may expose investors to potentially rapid and substantial losses.(Media - TD Ameritrade-Rothberg)

To view the Morningstar ratings, please click here.

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