Growing public awareness of global warming, coupled with institutional investors’ renewed interest in alternative asset classes, is giving a boost to index providers that screen for green.
"We have to act now," says New York State Comptroller Thomas DiNapoli, who pushed the New York State Common Retirement Fund to invest in green indexes recently. "There’s too much at risk for our planet."
Most large pension fund managers, however, have not shared DiNapoli’s urgency — at least not until now. The vast majority are still sitting on the green sidelines, according to a survey of 39 of the largest pension fund managers in the U.K. conducted this summer by FairPensions, a London-based organization that promotes responsible investing. "Climate change as an investment issue is still very much a niche issue rather than mainstream," says Louise Rouse, director of investor engagement at FairPensions.
The green sector has been hard for large-fund investors to tap. The lack of pure-play green companies — firms in the business of churning out environmentally friendly products and services — makes it difficult for large pension funds to build a sizable green portfolio.
That may be changing, thanks to the recent emergence of green indexes. Jane Goodland, senior investment consultant at Watson Wyatt in London, says there are some 80 different green or sustainable indexes offered by about 20 different companies today, up from virtually none five years ago. Some include Fortune 500 companies with so-called sustainable production methods, while others limit their investments to small-cap cleantech firms.
Under DiNapoli’s direction, the $116.5 billion-in-assets Common Retirement Fund became the first pension fund to invest in green indexes assembled and licensed by HSBC Bank and London-based index provider FTSE. In April 2008, DiNapoli earmarked $500 million for a green investment program and handed the first $200 million to senior investment officer Robert Arnold, head of the public equities group. After extensive research, Arnold invested the sum this August, splitting it between the FTSE environmental technology 50 index and HSBC global climate change benchmark index.
His group also investigated green indexes sponsored by Dow Jones and by KLD Analytics & Research, a Boston-based investment research firm that consults on integrating environmental, social and governance factors into investment decisions. The Dow Jones sustainability indexes, created by Sustainable Asset Management in Zurich in 1999, measure companies on how they conduct their businesses rather than on the products and services they provide, as the FTSE and HSBC indexes both do. The DJS indexes include firms across many sectors, including transportation, pharmaceuticals and even gambling.
The FTSE environmental technology 50 index includes the world’s 50 largest pure-play environmental technology companies, such as Vestas Wind Systems, a renewable and alternative energy company in Denmark, and Suez Environment, a waste management and technology outfit in France. For the three years ended September 30, 2009, it produced an annualized 15.3 percent return.
The HSBC global climate change index, launched in September 2007, covers a broader array of companies, involved in everything from geothermal power production to fuel cells. To qualify for the index, companies must generate at least 10 percent of their core business from climate change technology. The index includes 377 firms with a minimum market capitalization of $500 million. Its annualized return since inception in 2004 through mid-October was 10.59 percent.
Investing in green is not a natural fit for large-fund investors, given the volatility of the sector. "It’s a natural impediment to the actual investment if you’re investing in a space that’s nascent and quite small," adds Michael Underhill, CIO of Capital Innovations, a $2.6 billion independent investment advisory firm in Hartland, Wisconsin.
But the green indexes could change that. If DiNapoli — a member of the P8 Group, a global organization of pension investors addressing climate change — has his way, the trend will continue to pick up steam.
11/25/2009
11/24/2009
Earth Capital Partners launches $5B environmental fund
By Emma Ritch
Published 2008-12-08 08:17
A new venture capital fund is launching in early 2009, with the goal of raising $5 billion in the next five years to invest in energy security and climate change.
London-based Earth Capital Partners is spearheaded by former Marc Group chief Stanley Fink. The fund is expected to be run by Rufus Warner, formerly of Close Investments.
The group's first funds are expected to focus on solar, waste-to-energy, agriculture, and new technologies. Later funds are planned for infrastructure, forestry, carbon trading and energy arbitrage.
The environmentally focused fund has reportedly secured $250 million in seed investment. Earth Capital Partners expects to attract institutional investors such as pension
funds.
The company said environmentally focused funds are finding it easier to raise money than other funds.
The fund is awaiting government approval.
Other major funds have launched in recent weeks with the expectation that environmental technologies could perform better than other investments during the economic downturn (see Cleantech funds worth $1.9B lead the week [1]).
Among them, U.K.-based Aviva [2] Investors announced plans to raise a €500 million ($625 million) fund for cleantech investing in Europe (see Aviva creates €500M fund for European cleantech [3]). London-based investment firm Climate Change Capital [4] announced that it plans to invest in China for the first time, setting aside RMB 5 billion ($732 million USD) to take advantage of deals during the economic downturn (see Climate Change Capital plans $732M for Chinese cleantech [5]).
And venture capital investment fund CMEA Ventures [6] has launched a $400 million late-stage fund focused on alternative energy.
Published 2008-12-08 08:17
A new venture capital fund is launching in early 2009, with the goal of raising $5 billion in the next five years to invest in energy security and climate change.
London-based Earth Capital Partners is spearheaded by former Marc Group chief Stanley Fink. The fund is expected to be run by Rufus Warner, formerly of Close Investments.
The group's first funds are expected to focus on solar, waste-to-energy, agriculture, and new technologies. Later funds are planned for infrastructure, forestry, carbon trading and energy arbitrage.
The environmentally focused fund has reportedly secured $250 million in seed investment. Earth Capital Partners expects to attract institutional investors such as pension
funds.
The company said environmentally focused funds are finding it easier to raise money than other funds.
The fund is awaiting government approval.
Other major funds have launched in recent weeks with the expectation that environmental technologies could perform better than other investments during the economic downturn (see Cleantech funds worth $1.9B lead the week [1]).
Among them, U.K.-based Aviva [2] Investors announced plans to raise a €500 million ($625 million) fund for cleantech investing in Europe (see Aviva creates €500M fund for European cleantech [3]). London-based investment firm Climate Change Capital [4] announced that it plans to invest in China for the first time, setting aside RMB 5 billion ($732 million USD) to take advantage of deals during the economic downturn (see Climate Change Capital plans $732M for Chinese cleantech [5]).
And venture capital investment fund CMEA Ventures [6] has launched a $400 million late-stage fund focused on alternative energy.
8/28/2009
Carbon emission trading to become China's new financial product
Carbon emission trading will become a new financial product and be traded on China's exchanges, said Mei Dewen, general manager of China Beijing Environmental Exchange (CBEE) on August 26.
Xie Zhenhua, vice minister in charge of the National Development and Reform Commission (NDRC), also noted that exploratory emission trading would be open to certain fields. Industry insiders believe that Xie's words reflect the government's positive attitude.
Experts predict that by 2012, the world carbon emission trading market may surpass the oil market as the largest global trading system. The World Bank estimated that China would take 35 to 45 percent of the world potential for CDM project activities by 2010.
China has already established a carbon emission trading system led by the CBEE, Shanghai Environment Energy Exchange and Tianjin Climate Exchange. However, unlike carbon emission trading markets in the Europe and the U.S., divisible standardized futures contracts are not included in China's three emission exchanges.
China has the largest carbon resources in the world and is the leading country in the world pipeline of CDM projects. But if China fails to establish its carbon trading market quickly enough, it may lose its pricing rights in the global carbon emission market, said Mei.
By People's Daily Online
Xie Zhenhua, vice minister in charge of the National Development and Reform Commission (NDRC), also noted that exploratory emission trading would be open to certain fields. Industry insiders believe that Xie's words reflect the government's positive attitude.
Experts predict that by 2012, the world carbon emission trading market may surpass the oil market as the largest global trading system. The World Bank estimated that China would take 35 to 45 percent of the world potential for CDM project activities by 2010.
China has already established a carbon emission trading system led by the CBEE, Shanghai Environment Energy Exchange and Tianjin Climate Exchange. However, unlike carbon emission trading markets in the Europe and the U.S., divisible standardized futures contracts are not included in China's three emission exchanges.
China has the largest carbon resources in the world and is the leading country in the world pipeline of CDM projects. But if China fails to establish its carbon trading market quickly enough, it may lose its pricing rights in the global carbon emission market, said Mei.
By People's Daily Online
FourWinds Starts $40 Million Waste-Management Investment Fund
By Chanyaporn Chanjaroen
Aug. 27 (Bloomberg) -- FourWinds Capital Management, which manages about $1.4 billion in natural-resource funds, started a private-equity fund investing in waste-management companies.
The Waste Resource Fund began this month with $40 million, Chris Armitage, the U.K. head for the Boston-based firm, said Aug. 25 in an interview in London. The fund has three local- government pension funds, from the U.K. and Norway, as investors, he said.
“We’re looking at innovative ways to make money in more than one way from a waste business,” said Armitage, who spent more than 20 years in pension management before joining FourWinds in 2006. The new fund will buy stakes of 25 percent to 40 percent in existing companies to help them expand, he said.
Waste-management companies are drawing investors as more governments act to promote recycling, curb landfills and protect the environment. Waste Management Inc., the biggest U.S. trash hauler, tried to buy Republic Services Inc. before scrapping its bid in October. Biffa Ltd. was bought in April 2008, less than two years after U.K. water company Severn Trent Plc spun it off.
“The opportunities are enormous for companies investing in areas where there is supply constraint, such as landfill, and strong demand, because of population growth and increasing wealth,” Armitage said.
The 41-company Bloomberg World Environmental Control Index added 7.1 percent this year, led by Rino International Corp., a Chinese maker of wastewater treatment equipment. The shares have jumped almost fourfold.
Still, Paris-based Suez Environnement SA, Europe’s second- biggest water company, reported a 13 percent drop in first-half profit yesterday after the world recession curbed demand for waste collection and treatment.
FourWinds may introduce another fund investing in waste- management infrastructure, Armitage said.
Aug. 27 (Bloomberg) -- FourWinds Capital Management, which manages about $1.4 billion in natural-resource funds, started a private-equity fund investing in waste-management companies.
The Waste Resource Fund began this month with $40 million, Chris Armitage, the U.K. head for the Boston-based firm, said Aug. 25 in an interview in London. The fund has three local- government pension funds, from the U.K. and Norway, as investors, he said.
“We’re looking at innovative ways to make money in more than one way from a waste business,” said Armitage, who spent more than 20 years in pension management before joining FourWinds in 2006. The new fund will buy stakes of 25 percent to 40 percent in existing companies to help them expand, he said.
Waste-management companies are drawing investors as more governments act to promote recycling, curb landfills and protect the environment. Waste Management Inc., the biggest U.S. trash hauler, tried to buy Republic Services Inc. before scrapping its bid in October. Biffa Ltd. was bought in April 2008, less than two years after U.K. water company Severn Trent Plc spun it off.
“The opportunities are enormous for companies investing in areas where there is supply constraint, such as landfill, and strong demand, because of population growth and increasing wealth,” Armitage said.
The 41-company Bloomberg World Environmental Control Index added 7.1 percent this year, led by Rino International Corp., a Chinese maker of wastewater treatment equipment. The shares have jumped almost fourfold.
Still, Paris-based Suez Environnement SA, Europe’s second- biggest water company, reported a 13 percent drop in first-half profit yesterday after the world recession curbed demand for waste collection and treatment.
FourWinds may introduce another fund investing in waste- management infrastructure, Armitage said.
8/17/2009
Solar Power Generation Capacity May Double in 2010
By Dinakar Sethuraman
(Corrects fund performance in the seventh paragraph.)
July 17 (Bloomberg) -- New solar power generation may double next year, recovering from low capacity utilization caused by the global financial crisis, as China and the U.S. increase demand for clean energy, a fund manager said.
Asian ventures led by Suntech Power Holdings Co., Trina Solar Ltd. and Canadian Solar Inc. may benefit as 10 gigawatts of electricity produced from the sun is added in 2010, from an estimated 6 gigawatts this year, said Thiemo Lang, portfolio manager at the 230 million euros ($324 million) SAM Smart Energy Fund.
“The market may not grow in capacity this year because of the negative effects of the financial crisis,” Lang said in an interview by telephone from Zurich. “Next year looks much better because we see two new regions in U.S. and China.”
New investments in clean energy may surge to $450 billion in 2012 from $150 billion in 2007 as the U.S. and Europe step up efforts to reduce emissions, Nomura Securities said. China may boost solar capacity to 10 gigawatts by 2020, enough to supply about 10 million U.S. homes, from 1.8 gigawatts now, according to the Chinese Renewable Energy Industries Association.
Suntech, the world’s largest maker of solar-power modules, and Trina Solar are among Asian companies that may gain as lower production costs give them “distinctive” advantages over manufacturers in Europe and the U.S., Lang said. Both are based in Jiangsu province in eastern China.
Shares Recovering
Suntech has gained 36 percent this year to $15.86 a share in New York, while Trina Solar has jumped 161 percent to $24.20 over the same period. Suntech is still 66 percent below its August 2008 peak of $47.81, while Trina Solar is 29 percent below its high, reached in the same month. Canadian Solar rose 108 percent this year to $13.42, still 59 percent below its August peak.
The SAM Smart Energy Fund is part of Robeco Group, a global asset manager and a unit of Rabobank Groep NV, according to an e-mail by François Vetri, a company spokesman. The fund has fallen 31 percent in the past 12 months, according to Bloomberg data, while the Bloomberg World Energy-Alternate Sources Index has declined 51 percent over the same period.
The fund owns shares in Trina Solar, Yingli Green Energy Holding Co., Canadian Solar, JA Solar Holdings Co. and Taiwan’s Gintech Energy Corp. and E-Ton Solar Tech Co., he said.
The solar panel market is oversupplied as 12 gigawatts of capacity chases 6 gigawatts of demand this year, Lang said. Producers may add as much as 50 percent more next year.
Current Capacity Glut
“In the first quarter solar utilization was only 30 percent,” Lang said. “There’s more capacity available than the market can absorb.”
The Asian suppliers were at full capacity at the end of the second quarter, while the European suppliers were operating at about 50 percent utilization, he said. Increasing use of solar power generates carbon-emission credits for polluters in Europe.
Prices of carbon credits, used by European nations to offset emissions, may stay at current levels as a contraction in manufacturing cuts demand for the credits, he said.
“I will not be amazed for prices to stay at this level,” Lang said. European Union emission permits for December delivery closed at 14.53 euros a ton yesterday on the European Climate Exchange in London. While they are up about 10 percent this month, they are down 46 percent from a year ago.
There are more opportunities to invest in Asian solar businesses compared with wind power makers as the industry has turned mature, Lang said. New wind generation capacity may expand by about 18 percent in 2010 with growth in newly installed capacity expected to be flat this year. The world added 27 gigawatts of wind power capacity in 2008.
“There are not many opportunities to invest in Asian wind companies as in solar makers,” Lang said. “Solar industry can reduce costs quite dramatically while wind turbine costs do not decline at the same pace,” he said. Electricity produced from wind and solar projects account for less than 2 percent of the global output.
To contact the reporter on this story: Dinakar Sethuraman in Singapore at dinakar@bloomberg.net.
(Corrects fund performance in the seventh paragraph.)
July 17 (Bloomberg) -- New solar power generation may double next year, recovering from low capacity utilization caused by the global financial crisis, as China and the U.S. increase demand for clean energy, a fund manager said.
Asian ventures led by Suntech Power Holdings Co., Trina Solar Ltd. and Canadian Solar Inc. may benefit as 10 gigawatts of electricity produced from the sun is added in 2010, from an estimated 6 gigawatts this year, said Thiemo Lang, portfolio manager at the 230 million euros ($324 million) SAM Smart Energy Fund.
“The market may not grow in capacity this year because of the negative effects of the financial crisis,” Lang said in an interview by telephone from Zurich. “Next year looks much better because we see two new regions in U.S. and China.”
New investments in clean energy may surge to $450 billion in 2012 from $150 billion in 2007 as the U.S. and Europe step up efforts to reduce emissions, Nomura Securities said. China may boost solar capacity to 10 gigawatts by 2020, enough to supply about 10 million U.S. homes, from 1.8 gigawatts now, according to the Chinese Renewable Energy Industries Association.
Suntech, the world’s largest maker of solar-power modules, and Trina Solar are among Asian companies that may gain as lower production costs give them “distinctive” advantages over manufacturers in Europe and the U.S., Lang said. Both are based in Jiangsu province in eastern China.
Shares Recovering
Suntech has gained 36 percent this year to $15.86 a share in New York, while Trina Solar has jumped 161 percent to $24.20 over the same period. Suntech is still 66 percent below its August 2008 peak of $47.81, while Trina Solar is 29 percent below its high, reached in the same month. Canadian Solar rose 108 percent this year to $13.42, still 59 percent below its August peak.
The SAM Smart Energy Fund is part of Robeco Group, a global asset manager and a unit of Rabobank Groep NV, according to an e-mail by François Vetri, a company spokesman. The fund has fallen 31 percent in the past 12 months, according to Bloomberg data, while the Bloomberg World Energy-Alternate Sources Index has declined 51 percent over the same period.
The fund owns shares in Trina Solar, Yingli Green Energy Holding Co., Canadian Solar, JA Solar Holdings Co. and Taiwan’s Gintech Energy Corp. and E-Ton Solar Tech Co., he said.
The solar panel market is oversupplied as 12 gigawatts of capacity chases 6 gigawatts of demand this year, Lang said. Producers may add as much as 50 percent more next year.
Current Capacity Glut
“In the first quarter solar utilization was only 30 percent,” Lang said. “There’s more capacity available than the market can absorb.”
The Asian suppliers were at full capacity at the end of the second quarter, while the European suppliers were operating at about 50 percent utilization, he said. Increasing use of solar power generates carbon-emission credits for polluters in Europe.
Prices of carbon credits, used by European nations to offset emissions, may stay at current levels as a contraction in manufacturing cuts demand for the credits, he said.
“I will not be amazed for prices to stay at this level,” Lang said. European Union emission permits for December delivery closed at 14.53 euros a ton yesterday on the European Climate Exchange in London. While they are up about 10 percent this month, they are down 46 percent from a year ago.
There are more opportunities to invest in Asian solar businesses compared with wind power makers as the industry has turned mature, Lang said. New wind generation capacity may expand by about 18 percent in 2010 with growth in newly installed capacity expected to be flat this year. The world added 27 gigawatts of wind power capacity in 2008.
“There are not many opportunities to invest in Asian wind companies as in solar makers,” Lang said. “Solar industry can reduce costs quite dramatically while wind turbine costs do not decline at the same pace,” he said. Electricity produced from wind and solar projects account for less than 2 percent of the global output.
To contact the reporter on this story: Dinakar Sethuraman in Singapore at dinakar@bloomberg.net.
The top 10 U.S. states for cleantech in 2009
August 17, 2009 by Shawn Lesser
The beautiful thing about the U.S. is that we have abundant renewable resources—both in our environment and in our brain power.
So be it capturing the amazing wind resources in Texas, tapping into the great brain cluster in Boston with MIT and Harvard, or transitioning auto workers in Michigan and Ohio to produce wind turbines, every state has its own special mix of renewable resources that are just being waiting to be tapped.
But some states are doing a better job than others at bringing together all the parts of the economy with natural resources and manufacturing know-how.
A huge piece of the puzzle is political will. Public policies on a federal, state and local level are and will continue to be an important driver and indicator for the future of the cleantech economy. Whatever inherent advantages a region or state may have, it requires the firm commitment and backing of political leaders for any initiative to gain traction.
Obviously it’s been a challenging time for industries across the board, but cleantech has a bright future. As my friend Nick Parker, executive chairman of the Cleantech Group, said in January 2009: "In 2008, there was a quantum leap in talent, resources and institutional appetite for clean technologies. Now, more than ever, clean technologies represent the biggest opportunities for job and wealth creation."
So which states are the leaders in the space? The good news is every state in the union is involved in cleantech in some way, so in a sense we can’t say there are any losers. But we can say there are some bigger winners.
I started by looking at data points that were are available on cleantech jobs and job growth, cleantech companies, and VC dollars invested. From there, I tried to look at more intangible aspects of each state's initiatives, especially government policies.
In the end I tried to come up with a fair rating, but I am well aware that certain people will disagree. That's fine; the main reason for this rating is to open up the conversation.
So here are my rankings for the top cleantech states of 2009:
California is the 800-pound gorilla of cleantech, with half of all cleantech-related venture capital going to the Golden State, a total of $6.5 billion from 2006 to 2008. Backed by the leadership of Governor Arnold Schwarzenegger, they also have the most aggressive greenhouse-gas reduction targets in the country.
Texas boasts the world’s largest wind farm, and generates more electricity from wind than any other state. Moreover, Texas attracted more than $716 million in cleantech-related venture capital funds between 2006 and 2008.
Massachusetts can lay claim to the best university cluster in the world, with MIT, Harvard University, Boston University, Tufts University and Northeastern University helping attract from 2006 to 2008 $1.2 billion in venture capital funds—second only to California.
Colorado is cultivating a true cleantech culture, with roughly 200 cleantech firms dotting the area stretching from Colorado Springs to Fort Collins. The state has attracted more than 17,000 cleantech jobs from 2006 to 2008. Colorado was also able to attract Vestas Wind Systems, the world's leading supplier of wind turbines, to open four new plants—an investment of more than $600 million.
New Jersey is aiming to become the new Sunshine State, thanks to its strong public-private partnership. Back by Gov. Jon Corzine, New Jersey is the best place to do solar in the country. Very early in. Gov. Corzine’s administration established the Solar Renewable Energy Certificate (SREC) Program, which shifts the solar market away from a dependence on rebates to drive solar growth.
Tennessee is the billion dollar baby, thanks to strong political foresight of Gov. Phil Bredesen. That has helped the Volunteer State land two of the biggest cleantech deals in the last several years: Hemlock Semiconductor’s announced plans for a $1.2 billion polysilicon plant and German chemical firm Wacker Chemie’s announced plans for a $1 billion polysilicon factory in Tennessee (see Cleantech industry in the U.S. South emerging from stealth).
Pennsylvania, meanwhile, is itself trying to kick the fossil fuel habit, with strong leadership from Gov. Ed Rendell in attracting cleantech startups and the establishment of a $650 million energy fund to support the sector. Gov. Rendell was pushing "green" before it was a buzz word, back when he was mayor of Philadelphia (see Pennsylvania invests $23M to quadruple solar capacity).
New York aims to replace the Big Apple with the Green Apple, thanks to initiatives designed to lower the state’s carbon footprint and the establishment of several education-related and startup cluster initiatives around the cleantech sector.
Ohio is retooling for a green energy transition, moving away from heavy industry such as auto manufacturing in favor of green initiatives, such as seeking to establish itself as the second biggest wind turbine parts producer in the country. In fact, Ohio ranked among the top five states with the most jobs in clean energy, energy efficiency and environmentally friendly production in 2007.
Oregon, and specifically the Portland metro area, has established itself as a thought-leader in progressive environmental policies for the past 30 years. The area’s highly attractive living standards make it a powerhouse in terms of continuing to attract the intellectual capital that will drive the cleantech revolution. Oregon has had explosive growth rates in cleantech jobs around 50 percent!
Three additional states that deserved honorable mention even though they did not make our top 10: Michigan, Washington and North Carolina. All three have made strong strides in the area of cleantech: Michigan specifically in next generation battery productions (see Stealthy Khosla-backed battery startup driving economic makeover?), Washington in the area of hydro electric power, and North Carolina with great innovations coming out of the Research Triangle.
I had a conversation with Doug Cameron, managing director and chief science adviser at Piper Jaffrey, one of the most active investment banks in the cleantech/renewable space. Doug was previously the chief scientific officer for Khosla Ventures. I think he stated it best: "My hope is the clean and green get so integrated into everything we do that most businesses and industries become green, and it is the ones that are not that we highlight and count." I think that says it the best, and I am 100-percent of the same mindset!
Shawn Lesser is the president and founder of Atlanta-based Sustainable World Capital, which is focused on fund-raising for private equity cleantech/sustainable funds, as well as private cleantech companies. For information, visit his Web site.
Want to author a guest column yourself? We welcome contributions, and would like to hear from you. Guidance and directions here.
The beautiful thing about the U.S. is that we have abundant renewable resources—both in our environment and in our brain power.
So be it capturing the amazing wind resources in Texas, tapping into the great brain cluster in Boston with MIT and Harvard, or transitioning auto workers in Michigan and Ohio to produce wind turbines, every state has its own special mix of renewable resources that are just being waiting to be tapped.
But some states are doing a better job than others at bringing together all the parts of the economy with natural resources and manufacturing know-how.
A huge piece of the puzzle is political will. Public policies on a federal, state and local level are and will continue to be an important driver and indicator for the future of the cleantech economy. Whatever inherent advantages a region or state may have, it requires the firm commitment and backing of political leaders for any initiative to gain traction.
Obviously it’s been a challenging time for industries across the board, but cleantech has a bright future. As my friend Nick Parker, executive chairman of the Cleantech Group, said in January 2009: "In 2008, there was a quantum leap in talent, resources and institutional appetite for clean technologies. Now, more than ever, clean technologies represent the biggest opportunities for job and wealth creation."
So which states are the leaders in the space? The good news is every state in the union is involved in cleantech in some way, so in a sense we can’t say there are any losers. But we can say there are some bigger winners.
I started by looking at data points that were are available on cleantech jobs and job growth, cleantech companies, and VC dollars invested. From there, I tried to look at more intangible aspects of each state's initiatives, especially government policies.
In the end I tried to come up with a fair rating, but I am well aware that certain people will disagree. That's fine; the main reason for this rating is to open up the conversation.
So here are my rankings for the top cleantech states of 2009:
California is the 800-pound gorilla of cleantech, with half of all cleantech-related venture capital going to the Golden State, a total of $6.5 billion from 2006 to 2008. Backed by the leadership of Governor Arnold Schwarzenegger, they also have the most aggressive greenhouse-gas reduction targets in the country.
Texas boasts the world’s largest wind farm, and generates more electricity from wind than any other state. Moreover, Texas attracted more than $716 million in cleantech-related venture capital funds between 2006 and 2008.
Massachusetts can lay claim to the best university cluster in the world, with MIT, Harvard University, Boston University, Tufts University and Northeastern University helping attract from 2006 to 2008 $1.2 billion in venture capital funds—second only to California.
Colorado is cultivating a true cleantech culture, with roughly 200 cleantech firms dotting the area stretching from Colorado Springs to Fort Collins. The state has attracted more than 17,000 cleantech jobs from 2006 to 2008. Colorado was also able to attract Vestas Wind Systems, the world's leading supplier of wind turbines, to open four new plants—an investment of more than $600 million.
New Jersey is aiming to become the new Sunshine State, thanks to its strong public-private partnership. Back by Gov. Jon Corzine, New Jersey is the best place to do solar in the country. Very early in. Gov. Corzine’s administration established the Solar Renewable Energy Certificate (SREC) Program, which shifts the solar market away from a dependence on rebates to drive solar growth.
Tennessee is the billion dollar baby, thanks to strong political foresight of Gov. Phil Bredesen. That has helped the Volunteer State land two of the biggest cleantech deals in the last several years: Hemlock Semiconductor’s announced plans for a $1.2 billion polysilicon plant and German chemical firm Wacker Chemie’s announced plans for a $1 billion polysilicon factory in Tennessee (see Cleantech industry in the U.S. South emerging from stealth).
Pennsylvania, meanwhile, is itself trying to kick the fossil fuel habit, with strong leadership from Gov. Ed Rendell in attracting cleantech startups and the establishment of a $650 million energy fund to support the sector. Gov. Rendell was pushing "green" before it was a buzz word, back when he was mayor of Philadelphia (see Pennsylvania invests $23M to quadruple solar capacity).
New York aims to replace the Big Apple with the Green Apple, thanks to initiatives designed to lower the state’s carbon footprint and the establishment of several education-related and startup cluster initiatives around the cleantech sector.
Ohio is retooling for a green energy transition, moving away from heavy industry such as auto manufacturing in favor of green initiatives, such as seeking to establish itself as the second biggest wind turbine parts producer in the country. In fact, Ohio ranked among the top five states with the most jobs in clean energy, energy efficiency and environmentally friendly production in 2007.
Oregon, and specifically the Portland metro area, has established itself as a thought-leader in progressive environmental policies for the past 30 years. The area’s highly attractive living standards make it a powerhouse in terms of continuing to attract the intellectual capital that will drive the cleantech revolution. Oregon has had explosive growth rates in cleantech jobs around 50 percent!
Three additional states that deserved honorable mention even though they did not make our top 10: Michigan, Washington and North Carolina. All three have made strong strides in the area of cleantech: Michigan specifically in next generation battery productions (see Stealthy Khosla-backed battery startup driving economic makeover?), Washington in the area of hydro electric power, and North Carolina with great innovations coming out of the Research Triangle.
I had a conversation with Doug Cameron, managing director and chief science adviser at Piper Jaffrey, one of the most active investment banks in the cleantech/renewable space. Doug was previously the chief scientific officer for Khosla Ventures. I think he stated it best: "My hope is the clean and green get so integrated into everything we do that most businesses and industries become green, and it is the ones that are not that we highlight and count." I think that says it the best, and I am 100-percent of the same mindset!
Shawn Lesser is the president and founder of Atlanta-based Sustainable World Capital, which is focused on fund-raising for private equity cleantech/sustainable funds, as well as private cleantech companies. For information, visit his Web site.
Want to author a guest column yourself? We welcome contributions, and would like to hear from you. Guidance and directions here.
8/14/2009
Maverick Capital, Water Street, Seasons Capital, Alkeon and Galleon Management top Solar investing Hedge Fund List
August 13th, 2009
Last week HedgeTracker.com released its list of Top Solar-Focused hedge funds by percentage of assets. This week we look at the top hedge funds based on their total investment in the solar sector. The only hedge fund to make both of HedgeTracker’s lists is Partner Fund Management. The others on this week’s list include: Maverick Capital, Water Street Capital, Seasons Capital Management, Alkeon Capital Management and Galleon Management.
The top solar hedge fund investor is Lee Ainslie’s Maverick Capital. Mr. Ainslie is a “Tiger Cub,” or a former protégé of Julian Robertson of Tiger Management. As of Q1 ’09, the fund had $180.33mm of its $5,529mm, or 3.26% of its portfolio, invested in solar. However, Maverick Capital is not necessarily a believer in the solar sector overall, as the firm’s solar exposure is entirely concentrated in First Solar Inc. (FSLR) with 1,358,902 shares. Notably, over the first quarter, the firm purchased $85.29mm or 642,756 shares of FSLR.
Water Street Capital, a Jacksonville, Florida-based hedge fund manager, was the next largest solar sector investor with $67.61mm. Over the quarter, Water Street purchased $44mm in FSLR. Its solar holdings include:
First Solar Inc. (FSLR) - $44.03mm, 331,800 shares
Energy Conversion Devices Inc. (ENER) - $18.25mm, 1,375,600 shares
LDK Solar Co. (LDK) - $2.97mm, 468,900 shares
Next on the list is Long/Short equity manager Seasons Capital Management , with a total sector holding of $53.08mm. Like Maverick Capital, the only solar position held by Seasons Capital is First Solar Inc. (FSLR) - $53.08mm, 400,000 shares. The San Francisco-based firm was founded in 2003 by Ravi Kaza and focuses on the technology, media, telecom, consumer, and infrastructure sectors.
Partner Fund Management, another San Francisco-based investor, is fourth on the list, holding $49.49mm in solar equities. The firm’s holdings consist of:
First Solar Inc., (FSLR) - $38.96mm, 293,585 shares, Change $33.03mm
Suntech Power Holdings Co., (STP) - $8.12mm, 694,952 shares, Change $6.95mm
JA Solar Holdings Co., (JASO) - $2.30mm, 683,847 shares, Change $1.49mm
Partner Fund also sold out of $1.71mm of Yingli Green Energy Holding Co. (YGE), $1.05mm of LDK Solar Co., (LDK), and $0.26mm of Evergreen Solar Inc. (ESLR).
Fifth on the list is Takis Sparaggis’ Alkeon Capital Management with a total of $37.88mm invested in the solar sector. The technology-focused hedge fund’s exposure to the solar sector is concentrated in two equities, that of:
First Solar (FSLR) - $32.15mm, 242,301 shares, Change -$2.38mm and
Suntech Power (STP) - $5.73mm, 489,920 shares, Change $5.73mm.
Raj Rajaratnam’s Galleon Management , which also specializes in the technology sector, is the final hedge fund on the list with $36.45mm. Galleon’s solar exposure is spread across 6 solar stocks. Over the first quarter, the firm added to its FSLR, STP, JASO and ENER positions, while it trimmed its exposure to YGG and ESLR. The firm’s holdings were:
First Solar (FSLR) - $25.21mm, 190,000 shares, Change $8.48mm
Suntech Power (STP) - $3.92mm, 335,000 shares, Change $2.98mm
Yingli Green Energy (YGE) - $3.46mm, 575,000 shares, Change -$5.03mm
JA Solar (JASO) - $3.12mm, 925,000 shares, Change $1.08mm
Energy Conversion Devices (ENER) - $0.53mm, 40,000 shares, Change $0.53mm
Evergreen Solar (ESLR) - $0.21mm, 100,000 shares, Change -$0.05mm
During last quarter’s solar report, we noted that Chase Coleman’s Tiger Global Management was the largest buyer of solar stocks over the fourth quarter of 2008, when it purchased approximately $65 million in the sector. Like Maverick’s Lee Ainslie, Mr. Coleman is also a “Tiger Cub” and actually still shares an office with Julian Robertson. This quarter, Mr. Coleman reversed his solar bets, selling completely out of the sector. Tiger Global’s sells included: Yingli Green Energy (YGE) for $12.34mm, LDK Solar (LDK) for $16.01mm, and JA Solar (JASO) for $22.28mm
With the solar sector still in a nascent stage of development, hedge funds continue to actively adjust their sector investment bets. While FSLR seems to be the early favorite, the other emerging companies are still fostering great interest from top hedge fund managers seeking out growth opportunities.
The solar sector used for this analysis, included: First Solar Inc. (FSLR), Suntech Power Holdings (STP), SunPower Corp. (SPWRA & SPWRB), Yingli Green Energy Holding (YGE), LDK Solar Co. Ltd. (LDK), Energy Conversion Devices (ENER), JA Solar Holdings Co. (JASO), Evergreen Solar Inc. (ESLR), Trina Solar Ltd. (TSL), ReneSola Ltd (SOL), Canadian Solar Inc. (CSIQ), Solarfun Power Holdings (SOLF), and Ascent Solar (ASTI).
For more information on the hedge funds and portfolio managers mentioned in this article, please see their “Detailed Investor Profile” below. To see HedgeTracker’s Complete Hedge Fund Directory, click here.
Last week HedgeTracker.com released its list of Top Solar-Focused hedge funds by percentage of assets. This week we look at the top hedge funds based on their total investment in the solar sector. The only hedge fund to make both of HedgeTracker’s lists is Partner Fund Management. The others on this week’s list include: Maverick Capital, Water Street Capital, Seasons Capital Management, Alkeon Capital Management and Galleon Management.
The top solar hedge fund investor is Lee Ainslie’s Maverick Capital. Mr. Ainslie is a “Tiger Cub,” or a former protégé of Julian Robertson of Tiger Management. As of Q1 ’09, the fund had $180.33mm of its $5,529mm, or 3.26% of its portfolio, invested in solar. However, Maverick Capital is not necessarily a believer in the solar sector overall, as the firm’s solar exposure is entirely concentrated in First Solar Inc. (FSLR) with 1,358,902 shares. Notably, over the first quarter, the firm purchased $85.29mm or 642,756 shares of FSLR.
Water Street Capital, a Jacksonville, Florida-based hedge fund manager, was the next largest solar sector investor with $67.61mm. Over the quarter, Water Street purchased $44mm in FSLR. Its solar holdings include:
First Solar Inc. (FSLR) - $44.03mm, 331,800 shares
Energy Conversion Devices Inc. (ENER) - $18.25mm, 1,375,600 shares
LDK Solar Co. (LDK) - $2.97mm, 468,900 shares
Next on the list is Long/Short equity manager Seasons Capital Management , with a total sector holding of $53.08mm. Like Maverick Capital, the only solar position held by Seasons Capital is First Solar Inc. (FSLR) - $53.08mm, 400,000 shares. The San Francisco-based firm was founded in 2003 by Ravi Kaza and focuses on the technology, media, telecom, consumer, and infrastructure sectors.
Partner Fund Management, another San Francisco-based investor, is fourth on the list, holding $49.49mm in solar equities. The firm’s holdings consist of:
First Solar Inc., (FSLR) - $38.96mm, 293,585 shares, Change $33.03mm
Suntech Power Holdings Co., (STP) - $8.12mm, 694,952 shares, Change $6.95mm
JA Solar Holdings Co., (JASO) - $2.30mm, 683,847 shares, Change $1.49mm
Partner Fund also sold out of $1.71mm of Yingli Green Energy Holding Co. (YGE), $1.05mm of LDK Solar Co., (LDK), and $0.26mm of Evergreen Solar Inc. (ESLR).
Fifth on the list is Takis Sparaggis’ Alkeon Capital Management with a total of $37.88mm invested in the solar sector. The technology-focused hedge fund’s exposure to the solar sector is concentrated in two equities, that of:
First Solar (FSLR) - $32.15mm, 242,301 shares, Change -$2.38mm and
Suntech Power (STP) - $5.73mm, 489,920 shares, Change $5.73mm.
Raj Rajaratnam’s Galleon Management , which also specializes in the technology sector, is the final hedge fund on the list with $36.45mm. Galleon’s solar exposure is spread across 6 solar stocks. Over the first quarter, the firm added to its FSLR, STP, JASO and ENER positions, while it trimmed its exposure to YGG and ESLR. The firm’s holdings were:
First Solar (FSLR) - $25.21mm, 190,000 shares, Change $8.48mm
Suntech Power (STP) - $3.92mm, 335,000 shares, Change $2.98mm
Yingli Green Energy (YGE) - $3.46mm, 575,000 shares, Change -$5.03mm
JA Solar (JASO) - $3.12mm, 925,000 shares, Change $1.08mm
Energy Conversion Devices (ENER) - $0.53mm, 40,000 shares, Change $0.53mm
Evergreen Solar (ESLR) - $0.21mm, 100,000 shares, Change -$0.05mm
During last quarter’s solar report, we noted that Chase Coleman’s Tiger Global Management was the largest buyer of solar stocks over the fourth quarter of 2008, when it purchased approximately $65 million in the sector. Like Maverick’s Lee Ainslie, Mr. Coleman is also a “Tiger Cub” and actually still shares an office with Julian Robertson. This quarter, Mr. Coleman reversed his solar bets, selling completely out of the sector. Tiger Global’s sells included: Yingli Green Energy (YGE) for $12.34mm, LDK Solar (LDK) for $16.01mm, and JA Solar (JASO) for $22.28mm
With the solar sector still in a nascent stage of development, hedge funds continue to actively adjust their sector investment bets. While FSLR seems to be the early favorite, the other emerging companies are still fostering great interest from top hedge fund managers seeking out growth opportunities.
The solar sector used for this analysis, included: First Solar Inc. (FSLR), Suntech Power Holdings (STP), SunPower Corp. (SPWRA & SPWRB), Yingli Green Energy Holding (YGE), LDK Solar Co. Ltd. (LDK), Energy Conversion Devices (ENER), JA Solar Holdings Co. (JASO), Evergreen Solar Inc. (ESLR), Trina Solar Ltd. (TSL), ReneSola Ltd (SOL), Canadian Solar Inc. (CSIQ), Solarfun Power Holdings (SOLF), and Ascent Solar (ASTI).
For more information on the hedge funds and portfolio managers mentioned in this article, please see their “Detailed Investor Profile” below. To see HedgeTracker’s Complete Hedge Fund Directory, click here.
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