Kayne Anderson Midstream/Energy Fund, Inc. (the ?Fund?) announced today its initial quarterly distribution of $0.375 per share for the quarter ending February 28, 2011. This represents a partial distribution based on the expected net distributable income generated by the Fund's portfolio during its first three months of operations. The distribution represents an annualized yield of 6.0% on the initial public offering price of $25.00 per share. The distribution will be payable on March 30, 2011 to common stockholders of record on March 23, 2011, with an ex-dividend date of March 21, 2011.

As of January 18, 2011, the Fund has received net proceeds of $507 million from its IPO, which includes the net proceeds from the sale of 2.3 million shares pursuant to the underwriters' over-allotment option. At such date, the Fund had invested $497 million (or 98%) of the net proceeds. Included in this total is the $30 million private investment in Buckeye Partners, L.P., which closed on January 18th.

As previously disclosed, the Fund has committed to invest $25 million in PAA Natural Gas Storage, L.P. in a privately negotiated transaction. Once this investment is complete, the Fund will have invested $522 million, which is in excess of the net proceeds raised in the IPO. The Fund is finalizing a revolving credit facility and expects to close on such facility later this week. The Fund will provide a summary of the facility's terms when the transaction closes.

The Fund expects it will become fully invested during Q2 2011 (including proceeds from leverage) and expects to pay a distribution for such quarter in an amount that represents an annualized yield of 6.5% on the IPO price of $25.00 per share. The Fund anticipates paying this distribution in July 2011.

It is anticipated that a portion of the distribution paid in March will be treated as a return of capital for tax purposes. The final determination of such amount will be made in early 2012 when the Fund can determine its earnings and profits. The final tax status of the distribution may differ substantially from this preliminary information.

Kayne Anderson Midstream/Energy Fund, Inc. is a non-diversified, closed-end management investment company registered under the Investment Company Act of 1940, whose common stock is traded on the New York Stock Exchange. The Fund's investment objective is to provide a high level of total return with an emphasis on making quarterly cash distributions to its stockholders by investing at least 80% of its total assets in securities of companies in the Midstream/Energy Sector, consisting of: (a) Midstream Master Limited Partnerships (?MLPs?), (b) Midstream Companies, (c) Other MLPs and (d) Other Energy Companies. The Fund anticipates that the majority of its investments will consist of investments in Midstream MLPs and Midstream Companies. See Glossary of Key Terms on page ii of the Prospectus for definitions of certain key terms.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS: 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 results to differ from the Fund's historical experience and its 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; MLP industry risk; leverage risk; valuation risk; interest rate risk; tax risk; and other risks discussed in the Fund's filings with the SEC. 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.

KA Fund Advisors, LLC
Monique Vo, 877-657-3863
http://www.kaynefunds.com