Salient MLP & Energy Infrastructure Fund (the "Fund") (NYSE: SMF) announced today its net asset value as of September 30, 2011 and provided an update on the fund's current portfolio and its overall hedging strategy which protected net asset value during the last several months.

As of September 30, 2011 the Fund's net assets were $136.8 million and the net asset value per share was $22.32 compared to May 31, 2011 when the net assets were $133.5 million and the net asset value per share was $23.82. Over this time period, the net asset value declined by 6.3% compared to the MLP closed-end fund peer group which declined 9.5% on a net asset value basis over this same time period.1 The share price on May 31, 2011 was $25.34 and it closed at $21.17 on September 30, 2011 resulting in a 16.5% price decline which exceeded its 6.3% net asset value decline. As a result, the share price closed on September 30, 2011 at a 5.1% discount to net asset value.

The fund's actively managed hedging strategy helped protect SMF's net asset value from greater decline during the recent market correction between June to September. Below (Figure 1) is an unaudited summary of the realized and unrealized gains from our hedging activity over this time period:

 
Consolidated Hedging Activity as of 9/30/2011
     

Unrealized Gains (losses)

Futures Contracts - RIC $ 355,305
Futures Contracts - C Corp $ 394,967

Swap Contracts

 $ 1,195,360  
Total Consolidated Unrealized Hedging Gains $ 1,945,632
 

Realized Gains (losses)

Futures Contracts - RIC $ 4,178,222
Futures Contracts - C Corp $ (336,874 )

Swap Contracts

 $ 632,657  
Total Consolidated Realized Hedging Gains $ 4,474,006
 

As a reminder, the fund actively engages in various hedging strategies designed to protect the fund's net asset value during period of declining equity markets. This hedging strategy makes SMF distinctive among its peer group of MLP closed-end funds.

The Fund was invested as shown in the pie chart in Figure 2 as of September 30, 2011.

The Fund's ten largest holdings at September 30, 2011 are listed below (Figure 3):

               
Company     Sector     Shares     Amount

(in millions)

   

Percent of
Consolidated
Gross Assets

Kinder Morgan Management, LLC MLP Affiliate 284,206 $ 16.7 9.0 %
Enbridge Energy Management, LLC MLP Affiliate 482,216 $ 13.3 7.1 %
Enterprise Products Partners* MLP 243,330 $ 9.8 5.3 %
El Paso Pipeline Partners, L.P.* MLP 242,600 $ 8.6 4.6 %
Energy Transfer Equity, L.P.* MLP 241,360 $ 8.4 4.5 %
Teekay Offshore Partners, L.P. Marine Midstream 313,110 $ 7.7 4.1 %
VOC Energy Trust Energy Company 361,602 $ 7.5 4.1 %
Navios Maritime Partners, L.P. Marine Midstream 524,740 $ 7.0 3.8 %
Kinder Morgan, Inc. MLP Affiliate 263,750 $ 6.8 3.7 %
MV Oil Trust Energy Company 182,860 $ 6.8 3.7 %
 
*Held indirectly through the wholly owned C-Corporation, Salient MLP & Energy Infrastructure, Inc.
 

The Fund's consolidated unaudited balance sheet as of September 30, 2011 is shown below (Figure 4):

 
Salient MLP & Energy Infrastructure Fund
Consolidated Balance Sheet
September 30, 2011
(Unaudited)
 
Assets (in millions)
Investments1 $ 178.6
Cash and Cash Equivalents 3.8
Hedging and Other Assets   3.4
Total Assets 185.8
Liabilities
Line of Credit Payable2 47.3
Payable for Investments Purchased 1.0
Other Liabilities   0.7
Total Liabilities   49.0
Net Assets $ 136.8
 

The Fund had 6.1 million common shares outstanding as of September 30, 2011

 

1 Investments include the gross investment in the Salient MLP & Energy Infrastructure Fund, Inc.'s (C-Corporation) of $45.9 million. Net contributions to the C-Corporation are $35 million.

2The line of credit payable includes the C-Corporation's $12.75 million outstanding line as of September 30, 2011

 

Past performance is no guarantee of future results.

Salient MLP & Energy Infrastructure Fund is a Delaware statutory trust registered as a non-diversified, closed-end management investment company under the Investment Company Act of 1940, as amended. The Fund's investment objective is to provide a high level of total return with an emphasis on making quarterly cash distributions to shareholders. The Fund seeks to achieve that objective by investing at least 80% of its total assets in securities of MLPs and energy infrastructure companies. There can be no assurance that the Fund will achieve its investment objective.

This press release contains "forward-looking statements" as defined under the U.S. federal securities laws. Generally, the words "believe," "expect," "intend," "estimate," "anticipate," "project," "will," and similar expressions identify forward-looking statements, which generally are not historical in nature. Forward-looking statements are subject to certain risks and uncertainties that could cause actual future results to differ significantly from the Fund's present expectations or projections indicated in any forward-looking statements. These risks include, but are not limited to, changes in economic and political conditions; regulatory and legal changes; leverage risk; valuation risk; interest rate risk; tax risk; the volume of sales and purchase of shares; the continuation of investment advisory, administration and other service arrangements; and other risks discussed in the Fund's filings with the Securities and Exchange Commission. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. The Fund undertakes no obligation to publicly update or revise any forward-looking statements made herein. There is no assurance that the Fund's investment objective will be attained.

1 Peer group defined as other MLP Closed-End Funds. Source: CEFConnect.com, October 3, 2011.

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Salient Capital Advisors, LLC
Investor Relations, 800-809-0525
mlpinfo@salientpartners.com