Proven Money Managers Create New Firm, Real Profits

Curbstone Group (Curbstone), a private money management firm led by a trio of Wall Street veterans, announces the opening of three offices located in Houston, Boston and Tampa. The firm uses a two-pronged investment strategy that focuses on value investments in publicly traded Master Limited Partnerships (MLPs) and investments in other hard asset-related companies in the energy, natural resources, materials and agriculture sectors.

The firm predicts that swelling global demand for dwindling natural resources will result in higher long-term returns from equity investments in the energy, natural resources, materials and agriculture sectors. Along the way, Curbstone’s approach is positioned to generate significant current income by receiving distributions from its MLP investments and by collecting premiums from options sold around its equity positions.

Michael Catalano, Hinds Howard, Ryan Krueger and Andrew Nestor are the firm’s principals, with Nestor handling business development while the other three partners handle money management.

Curbstone caters to accredited investors directly and professional financial advisors who hire Curbstone as an outside manager for clients. Each investor has a private account at Goldman Sachs in the investor’s name, and can review each position and trade that occurs. Curbstone’s philosophy and stated discipline is to invest around real assets and deliver part of the net profits into the investor’s hands quarterly.

“We believe that over the next several years as the role of government expands, tax bills will rise. So, tax-friendly cash flows, like we are finding for our investors, will become even more important in the future,” Nestor commented. “As the supplies of US debt and US dollars soar, it’s quite clear that re-flation seeds are in the ground. Prices of natural resources, which are already in tight or shrinking supply, should benefit from a re-flationary environment.” Curbstone believes it has a strategy that can succeed without relying on the next bull market, especially because they believe rising commodity prices and re-flation may delay the next bull market for several years.

The principles, who privately own 100 percent of the firm, manage Curbstone’s portfolio exclusively. They also have a significant amount of personal capital invested through Curbstone in the same strategy as the clients. “We designed our own research and trading desks so that we’d be accountable for every win and loss and know exactly where to build in the future,” Krueger said.

Howard, who has been investing in MLPs for nearly 15 years, will direct Curbstone’s MLP strategy out of the Boston office. Before Curbstone, Howard helped found and then served as the primary research analyst for Lehman Brothers MLP Partners, which managed more than $1.0 billion of MLP investments with more than 50 percent annualized returns during his tenure. Howard also worked as an analyst in Lehman Brothers’ investment banking division, where he worked in the Natural Resources Group in New York and Houston. As an investment banker, Howard developed lasting relationships in the MLP sector by working on more than 25 lead-managed transactions, including seven initial public offerings. He worked on IPOs for Alliance Holdings GP L.P. (NASDAQ: AHGP), Boardwalk Pipeline Partners L.P. (NYSE: BWP), Inergy Holdings, L.P. (NASDAQ: NRGP) and Williams Partners L.P. (NYSE: WPZ) to name a few.

As a managing partner and portfolio manager for Curbstone, Howard will focus entirely on energy MLPs, an “under followed and un-crowded asset class” that has historically produced high tax-shielded income and price appreciation for investors. MLPs are companies that own and operate energy transportation and infrastructure assets, such as pipelines, oil and natural gas storage facilities and natural gas processing plants. There are approximately 75 energy MLPs that trade on the New York Stock Exchange and NASDAQ. Total return for the Alerian Index (NYSE: AMZ), which tracks the top 50 energy MLPs, has been more than 30% thus far in 2009 (as of May 26, 2009).

Catalano and Krueger will direct all other trading out of the Houston office. The duo focuses on buying hard asset backed investments and related equities they isolate in a research lab, which they built from scratch. The signature dish is collecting expensive option premiums by selling options around Curbstone’s core positions on both sides of the market (to bulls and bears). Unlike other managers, Catalano and Krueger employ zero leverage for investors.

Catalano and Krueger have extensive investment experience managing approximately $150 million together since 2001. Catalano began his career at Shearson in 1985. Krueger joined Smith Barney in 1996; both firms later became part of Citigroup, where Catalano and Krueger began to co-manage a portfolio at the end of 2001. Over the next six years, the actively managed portfolio outperformed a blended average of the S&P 500 and the Russell 3000 indices by more than 280 percent (net of fees).

Nestor, co-founder of Citrus Ventures (along with Howard), and also owner/director of a professional soccer team, is president and head of business development for Curbstone. He will spearhead the firm’s operations and business development, allowing the other managing partners to focus on the company’s primary areas of expertise. Nestor started his career at GE Franchise Finance in capital markets and private equity.

About Curbstone Group

Curbstone Group, founded in 2009, is a registered investment advisor with offices in Houston, Boston and Tampa. Curbstone manages portfolios in private accounts for private and institutional clients. Accounts are managed based on a firm-wide investment strategy and portfolio, developed using in–house research. For more information, visit www.curbstonegroup.com.