More than a decade after launching, OppenheimerFunds' [profile] alternatives business is about to get a 50-percent boost, and more is on the way. Yesterday the MassMutual subsidiary revealed a deal to buy Dallas-based MLP-focused mutual fund shop SteelPath [profile], and OpFunds chief investment officer Art Steinmetz told MFWire that more alternatives growth is on the horizon for OpFunds.

"Alternatives have been a growing part of the market. We've been looking for opportunities … It's a continuation of a priority that we have," Steinmetz said. "The folks at SteelPath came looking for us … They recognized that they were essentially topped out in their distribution. OppenheimerFunds is really strong in retail distribution [through advisors]."

"We weren't looking specifically for an MLP shop," Steinmetz said. "There was a deliberate element and there was a serendipitous element."

OpFunds already has a gold and minerals fund, a REIT fund and a commodities strategies fund. As for future growth in its alternatives business, either via product launches or acquisitions, Steinmetz insisted on being, in his words, "deliberately vague." The shop already has $5.6 billion in alternatives assets, not including the pending SteelPath deal.

"We're always looking at development opportunities," Steinmetz said.

Steinmetz likened the SteelPath acquisition, which is slated to close in Q4, to OpFunds' 1996 purchase of the Rochester Funds, in that he expects SteelPath to keep its name and its Dallas headquarters.

"It [the Rochester Funds] remains an entirely merged entity, but it continues to have a distinct brand," Steinmetz said. "SteelPath has a recognized brand in the marketplace … We certainly want to preserve that."

Steinmetz also confirmed that all 22 of SteelPath's employees will become OpFunds employees once the deal closes. OpFunds headcount currently reaches about 2,000.

"We're very excited about this particular asset space right now," Steinmetz said. "MLPs [master limited partnerships] are poised for explosive growth in the next few years as more and more people understand the benefits of these things. They're moving into the mainstream." 

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