Soros proposes $100bn IMF funds for green projects

Billionaire George Soros proposed that the richest nations use $100 billion of the foreign- exchange reserves they received from the International Monetary Fund to develop emissions-reducing projects in poor countries. "Developed countries' governments are laboring under the misapprehension that funding has to come from the national budgets, but that is not the case," he said today at climate- treaty talks in Copenhagen. "They have it already. It is lying idle in their reserves accounts and in the vaults" of the IMF. (www.Bloomberg.com)

Green Investing Gets Easier With Index Funds

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.

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.

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

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.

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.

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.

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.

Chinese wind

Written by Marks@Tiburon
Friday, 07 August 2009 00:00

The speed at which China is addressing its voracious appetite for energy and dire environmental issues is not being given enough attention.

While the country has suffered a slow down in economic growth due to the global credit crisis the government has prioritised the development of wind energy as an area for major investment. At the end of 2008 China’s installed wind capacity was 12,200MW. Already, during the first half of 2009, China’s capacity is reported to have increased by over 10,000MW and by the end of 2009 will account for around one third of the world’s installed wind generating capacity and rank second behind the United States, surpassing Germany and Spain. We believe that this could increase by 400% to over 117,000MW by 2013. With China accounting for 33% of global coal consumption and over 70% of electricity generated coming from coal fired generators, there is every incentive to achieve this fourfold increase over the next two years. Some might say it is a necessity.

Every man and his dog buys into the renewable theme. However with targets set for distant dates like 2020 it is often put on the back burner by investors. We believe that the process is accelerating so that the renewable proposition is not just investible, it is timely. It is for this reason that we are launching a new fund, Tiburon Green in Q3.

Ventus Funds reach £50m for investment in UK renewable energy projects

13th July 2009

Low carbon investor Climate Change Capital’s Ventus Funds have raised a further £13.85m of capital for investment in the UK renewable energy sector.

The Ventus Funds have now raised over £50m since their launch in 2005.

The Ventus Funds are specialist venture capital trusts focused exclusively on making investments in the small to medium sized UK onshore renewable energy sector and are the largest group of funds of their kind. Since 2005 the Ventus Funds have invested £30m in over 25 companies, contributing to the delivery over 50MW of new generating capacity.

In November of last year, the Ventus Funds, backed a scheme to enable Belfast’s major landfill site to produce electricity.

Former UBS Exec Founds Cleantech Investment Bank

July 1, 2009 - FINalternatives

Jeffrey McDermottJeffrey McDermott, formerly of UBS, has launched Greentech Capital Advisors, LLC, billed as a pure-play investment bank and advisory firm dedicated to alternative energy and cleantech companies.

McDermott, a former joint global head of UBS investment banking, has assembled a team from Goldman Sachs, Citi, Morgan Stanley and Barclays to focus on the alternative energy space.

“For [alternative energy and cleantech] companies to thrive, and for America to transition to a cleaner and more energy efficient economy, there is a need for a dedicated team of experienced bankers,” said McDermott. “Alternative energy and cleantech companies need bankers with deep industry knowledge, a wide array of product skills, and relationships with large industrial, power and utility companies who are the ultimate customers, strategic partners and consolidators for these companies.”

Greentech Capital Advisors offers clients services across the project finance, private equity, and mergers and acquisitions markets.

Partners include COO Robert A. Schultz, a former managing director and COO at Morgan Stanley Fund Services; Timothy F. Vincent, head of project finance and a former managing director of infrastructure clients at Goldman Sachs; Michael J. Molnar former lead equity research analyst on the U.S. alternative energy and coal sectors for Goldman Sachs; and Craig J. Wellen, formerly a senior banker at Citi responsible for strategic M&A transactions and capital raisings for numerous North American utilities, infrastructure funds and multinational energy companies.

R. Andrew de Pass, founder and former head of Citi’s Sustainable Development Investments (SDI), joins Greentech Capital Advisors as a senior advisor responsible for developing and leading the firm’s private equity investing business. Olav Junttila, who worked as an investment principal at SDI, has also joined the firm.

Greentech Capital Advisors provides financial advisory services, including buy-side and sell-side M&A, exclusive sale transactions, restructurings, private placements and project finance advisory to companies engaged in alternative energy; energy efficiency, transmission and distribution infrastructure; sustainable materials and products; waste management; recycling and water efficiency.

Leuthold Launches Cleantech Mutual Fund

July 29, 2009 _ FINalternatives

Minneapolis, Minn.-based asset management firm Leuthold Weeden Capital Management has recently unveiled a mutual fund that will focus on the rapidly growing clean technology sector.

The new offering, the Leuthold Global Clean Technology Fund, will invest in publicly traded clean technology companies, both in the U.S. and abroad, with the aim of holding stocks for a year or longer.

“Most funds out there are looking at recent technologies. We are looking at proven strategies that have the potential for growth,” says Eric Bjorgen, who co-manages the fund alongside Steve Leuthold, chief investment officer of the firm.

Cleantech industry expert David Kurzman, who recently joined the firm to provide analytical support for the fund, says there is a “perfect storm” of events happening now that makes this area of investing extremely attractive.

“First, you have political will, not only in the U.S. with the Obama administration looking to put north of $150 billion over the next decade into renewables and clean technologies, but you also have political will coming from multiple other countries. Second, there are a number of really attractive and talented managers that are coming into the industry…And third, the companies themselves have commercially viable products that are generating profits,” Kurzman says.

According to Bjorgen, the fund will focus on four clean technology groups: alternative energy, resource conservation, clean water, and clean environment.

The team is being rounded out by analyst Jun Zhu, who has been with the firm for over a year and has a strong background in both fundamental and quantitative analysis.

The Leuthold Global Clean Technology Fund offers both a Retail Share Class (LGCTX) and an Institutional Share Class (LGCIX).

Riding a green tide: Matthew Goldstein

Mon Aug 3, 2009 4:14pm EDT
-- Matthew Goldstein is a Reuters columnist. The views expressed are his own --

By Matthew Goldstein

NEW YORK (Reuters) - PetroAlgae (PALG.OB: Quote, Profile, Research, Stock Buzz) is one of those many clean-tech companies that seem to burn through cash faster than a Hummer goes through a gallon of gas. Yet something curious is going on with shares of this Melbourne, Florida-based company, which is hoping to make money from turning algae into oil.

Over the past month, the stock price of PetroAlgae has rocketed from $8 to as high as $32.75 on ultra-thin trading of the shares (as of late Monday it had fallen back to around $10).

PetroAlgae boasts a rather healthy $1 billion market value -- after being as high as $3.4 billion earlier Monday -- even though it has no revenues, a $34 million accumulated deficit and its auditor isn't sure the company can continue as a going concern.

There may be a plausible explanation for PetroAlgae's surprising surge. Last month, Exxon Mobil (XOM.N: Quote, Profile, Research, Stock Buzz) announced that it would spend $600 million to study the feasibility of algae-based fuels. There's no indication PetroAlgae will get any of those research dollars, but that's never stopped investors from wishing.

But the real winners here are David Grin and Eugene Grin, hedge fund managers who are longtime investors in cash-starved, small-cap companies. A group of funds managed by the brothers, including the $700 million Valens Capital Management series of hedge funds, effectively own a 96 percent equity stake in PetroAlgae.

The brothers Grin sank their teeth deep into PetroAlgae last December. In a series of transactions, a company controlled by Valens and the other funds paid $350,000 for 100 million shares of PetroAlgae, regulatory filings show. Then the Valens funds pumped an additional $10 million into PetroAlgae -- a cash infusion that accounted for nearly all the assets on the biotech company's balance sheet at the end of 2008.

Valens' investment in PetroAlgae represents nearly a quarter of the hedge funds' equity, say investors familiar with the fund. So the Valens funds, which were up a modest 4 percent in the first half of the year, should get a big bounce in July from the run-up in PetroAlgae shares.

Still, it's hard to see how Valens investors will ever truly profit from an Exxon-induced green wave of enthusiasm for algae-based fuels.

With the Grins' funds controlling all but a small sliver of PetroAlgae shares, the stock seldom trades. Any attempt by Valens and the other related hedge funds to try to take some profits by selling shares would quickly take the air out of this bubble.

And with PetroAlgae burning through $5.8 million in cash in the first quarter, about half the $10 million it received from Valens is gone. At the end of the first quarter, PetroAlgae reported having $5.6 million in assets. It had $11.6 million at the end of 2008.

So it's not clear what the Grins' longtime game plan is for this tiny cash-hungry company. An attorney for the hedge funds had little to say except to note that the Grins provide "shareholders and auditors with complete transparency and updates on the PetroAlgae investment."

Unless PetroAlgae can come to market soon with a viable technology for turning algae into fuel, it appears as if Valens investors may find themselves stranded on the rocks.

(Editing by Martin Langfield)

Commodity Hedge Funds Pick Up $1B

August 3, 2009 FinAlternatives

Commodity hedge funds did far better than most of their peers last year, and investors have rewarded them.

Even though commodities hedge funds lost 2.3% in the first half, hedge funds investing in the strategy took in nearly $1 billion in the second quarter, Hedge Fund Research reports. Commodities hedge funds now manage $11 billion, up 8.9% from the end of the first quarter, and nearly as much as the $11.1 billion they managed at the beginning of the year.

HFR said there were about 150 commodity hedge funds last month.

Roubini Says Commodity Prices May Rise in 2010

By Rebecca Keenan and Jason Scott

Aug. 3 (Bloomberg) -- Commodity prices may extend their rally in 2010 as the global recession abates, said Nouriel Roubini, the New York University economist who predicted the financial crisis.

“As the global economy goes toward growth as opposed to a recession, you are going to see further increases in commodity prices especially next year,” Roubini said today at the Diggers and Dealers mining conference in Kalgoorlie, Western Australia. “There is now potentially light at the end of the tunnel.”

Roubini, chairman of Roubini Global Economics and a professor at NYU’s Stern School of Business, joins former Federal Reserve Chairman Alan Greenspan in seeing signs of recovery. Commodity prices gained the most in more than four months on July 30 as investors speculated that the worst of the global recession has passed and consumption of crops, metals and fuel will rebound.

“The things he was saying provide good indicators for our business,” Martin McDermott, a manager for metals project development at SNC-Lavalin Group Inc., Canada’s biggest engineering and construction company, said at the conference. “The commodities that we’re involved with, being copper, nickel, gold, iron ore, all seem to have positive signs and we hope to take advantage of that.”

Greenspan said yesterday the most severe recession in the U.S. in at least five decades may be ending and growth may resume at a rate faster than most economists foresee. Oil has jumped 56 percent in 2009 and copper has surged 86 percent.

China Growth Target

Roubini predicted on July 23 that the global economy will begin recovering near the end of 2009, before possibly dropping back into a recession by late 2010 or 2011 because of rising government debt, higher oil prices and a lack of job growth.

Economic growth in China, the world’s biggest metals consumer, accelerated in the second quarter, gaining 7.9 percent from a year earlier. China, the biggest contributor to global growth, overtook Japan as the world’s second-largest stock market by value on July 16 after the nation’s 4 trillion yuan ($585 billion) stimulus package spurred record lending and boosted prices of shares and commodities.

China will meet its target of 8 percent growth in gross domestic product this year, Roubini said. Manufacturing in China climbed for a fifth month in July as stimulus spending and subsidies for consumer purchases countered a collapse in exports, and helped companies from chipmaker Semiconductor Manufacturing International Corp. to automaker General Motors Corp. as well as mining companies such as BHP Billiton Ltd. and Rio Tinto Group.

China’s official Purchasing Managers’ Index rose to a seasonally adjusted 53.3 in July from 53.2 in June. A reading above 50 indicates an expansion. The manufacturing index has climbed from a record low of 38.8 in November.

Aussie Dollar, Aluminum

A rise in commodity prices may help the Australian dollar, Roubini said today, adding he is “bullish” on the currency. Countries including Australia, New Zealand and Canada have so- called commodity currencies because raw materials generate more than 50 percent of their export revenues.

The Australian dollar today rose to the highest since September before retail sales and house price data tomorrow that may add to evidence the nation’s economy will rebound faster than the central bank forecast six months ago.

The price of aluminum, used in beverage cans and airplane parts, has declined by a third in the past year as the global recession crimped demand. A recovery in demand may be offset by the “huge amount of excess capacity,” which could be a risk to the price, Roubini said.

The Reuters/Jefferies CRB Index of 19 commodities has risen 12 percent this year. It jumped 3.9 percent on July 30 to 253.14, the biggest gain since March 19.

Slow Recovery

“That recovery will continue slowly, slowly over time,” Roubini said today. The global economy may contract 2 percent this year and swing to growth of 2.3 percent next year, he said.

Vale SA, the world’s biggest iron ore producer, said demand for metals is starting to recover and it will begin boosting output. Vale Chief Financial Officer Fabio Barbosa said on July 30 that “the worst is over”.

The price of oil may rise more than other commodities because of an expected rebound in demand, Roubini said separately in an interview with Bloomberg News. It may average between $70 and $75 a barrel next year, he said.

Oil Prices

Crude oil traded above $70 a barrel today for the first time in a month on speculation fuel demand will increase, amid signs the global economy is recovering from recession.

The U.S. economy, the world’s biggest, is likely to grow about 1 percent in the next two years, less than the 3 percent “trend,” Roubini said last month. President Barack Obama said on July 30 the U.S. may be seeing the beginning of the end of the recession.

In July 2006 Roubini predicted the financial crisis. In February of last year he forecast a “catastrophic” meltdown that central bankers would fail to prevent, leading to the bankruptcy of large banks with mortgage holdings and a “sharp drop” in equities. Since then, Bear Stearns Cos. was forced into a sale and Lehman Brothers Holdings Inc. went bankrupt, prompting banks to hoard cash and depriving businesses and households of access to capital.

Le négoce de matières premières s’impose dans l’arc lémanique. Un tiers de l’or noir mondial y est négocié.

La Tribune de Geenève / ALAIN JOURDAN | 15.07.2009 | 00:00


En quelques années, Genève est devenue la deuxième place mondiale pour l’achat et la vente de pétrole et de matières premières. Tout juste derrière Londres. Peu de gens savent que les cargos qui acheminent l’or noir vers les plates-formes d’affinage ou de stockage du monde entier, s’achètent et se vendent depuis de discrets bureaux installés dans la Vieille-Ville. Pendant longtemps, la City de Londres a eu la haute main sur ce marché très technique qui nécessite des levées de fonds et des prises de risque. En une dizaine d’années, la place financière genevoise s’est imposée sur le marché mondial du courtage de pétrole.

Addax, Gunvor, Mercuria, ­Vitol, Petrolin, Trafigura ou encore Litasco – autant de noms aujourd’hui mondialement connus dans le négoce de pétrole – ont pris d’importantes parts de marché. Ainsi, plus d’un tiers des 30 millions de barils qui s’échangent chaque jour dans le monde sont désormais négociés à Genève et la City pourrait bien perdre sa couronne dans les prochaines années. Car plus aucune société ne peut se payer le luxe d’être absente de Genève.

En juin 2006, Louis Dreyfus Commodities a déplacé toutes ses activités européennes de trading à Genève. «Ce métier ne peut pas exister sans les banques», explique Bernhard ­Lippuner, ancien directeur du département négoce au Credit Suisse et fondateur de l’association genevoise du négoce et de l’affrètement (GTSA). L’activité de trading n’aurait pas connu un tel essor sans l’engagement de grands établissements bancaires.

Plusieurs banques, dont BNP Paribas, le Crédit Agricole, ING, la Banque Cantonale de Genève, UBS ou Credit Suisse, ont créé et développé des départements spécialisés. «Un seul cargo de brut vaut entre 50 et 60 millions de dollars au prix actuel. Aucun trader ne peut se passer d’une banque», confirme Jérôme Schurink, directeur financier de Gunvor, l’une des sociétés de trading les plus dynamiques de la place genevoise. Ce sont elles qui financent les flux. Les sociétés de trading, elles, prennent les commandes et revendent.

Tout se joue sur des délais très courts. Un mois, trois mois maximum. La prise de risque doit être calculée au plus juste. C’est le savoir-faire des traders, des «matheux» le plus souvent. Aujourd’hui, le seul obstacle au développement de cette activité très lucrative pour Genève pourrait être la pénurie de spécialistes.

Genève fait des envieux

Depuis 2006, les grandes sociétés de trading travaillent au développement de filières de formation. Un master a d’ailleurs été créé en partenariat avec l’Université de Genève et le GTSA. Le succès de Genève fait des envieux, jusqu’à Singapour. La place financière asiatique envoie ainsi régulièrement des délégations, pour s’inspirer de ce qui se fait ici. Pourquoi Genève a ravi la place convoitée par Dubaï, Singapour, Chypre et même Zoug? «Parce que tout ce pétrole doit être transporté, que cela se fait par voie maritime et que les brokers qui font l’affrètement des bateaux sont
à ­Genève», explique Bernhard Lippuner.

Parmi ceux-ci, Mediterranean Shipping. Mais ce n’est pas tout. Jongler avec de tels volumes de produits pétroliers ou de gaz, aux quatre coins de la planète, nécessite de pouvoir contrôler ce qui est chargé et déchargé. SGS et Cotectna, deux sociétés d’inspection et de certification mondialement connues ont, ­elles aussi, pignon sur rue à Genève. Les sociétés de trading peuvent en outre s’appuyer sur un réseau de cabinets d’avocats spécialisés et de compagnies d’assurances (AXA, Helvetica) pour faire prospérer leur activité.

Les fondations fleurissent

Le bénéfice, pour Genève, est considérable. Mais il n’y a pas seulement les retombées fiscales. On estime aujourd’hui à près de 6000 le nombre de personnes travaillant dans le secteur du trading pétrolier. Au total, plus de 350 sociétés vivent de cette activité. Il y a un autre domaine qui profite de cette expansion, c’est celui du mécénat et des œuvres caritatives.

Une tradition, elle aussi, bien genevoise.

Autour des sociétés de trading se développent des fondations ou des programmes de soutien ou d’entraide à des pays en voie de développement. En avril 2008, l’épouse de Guennadi Timtchenko, le fondateur de Gunvor, a créé la Fondation Neva qui soutient des actions dans le domaine de l’art, de la culture, de la santé, de l’éducation, de l’environnement… Le Suisse Jean Claude Gandur (Addax) a créé, lui, une fondation pour soutenir des projets de développement économique et social en Afrique et au Moyen-Orient.





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Atouts locaux: «L’aéroport est à côté»

L’ambiance est calme, presque décontractée. Derrière leurs écrans, des traders achètent et vendent. Un pool s’occupe du pétrole brut, l’autre des produits raffinés. La vue est imprenable. Les bureaux situés quai Général-Guisan donnent directement sur la rade. «On s’est installés à Genève en 2003. Au départ, nous avions un petit bureau avec cinq personnes», raconte Jérôme Schurink, le directeur financier de Gunvor.

Aujourd’hui, la société de trading loue 1000 mètres carrés de bureau. En moins de cinq ans, l’effectif est passé de 20 à 80 personnes. «Et d’ici à la fin de l’année on sera plus de 100», assure le directeur de Gunvor, qui a réalisé un chiffre d’affaires de 65 milliards de dollars en 2008. Pourquoi avoir choisi Genève? «C’est plus facile de faire venir du monde ici qu’ailleurs. Il suffit de regarder les conditions de travail que l’on a», poursuit Jérôme Schurink.

Le bénéfice des bilatérales

Il y a évidemment la présence des banques indispensables aux activités de trading, mais cela ne fait pas tout. «On a pu se développer sans beaucoup de problèmes et de ­contraintes majeures. Depuis les bilatérales, il est, en outre, plus facile de recruter des gens en Europe. Parmi notre personnel, nous avons des Français, des Suédois, des Finlandais, des Italiens, des Espagnols, des ­Allemands, une Polonaise et une Estonienne», poursuit le directeur de Gunvor.

La qualité de vie de Genève fait florès

Pour la plupart, ils sont bardés de diplômes universitaires en économie et finance. Beaucoup préfèrent Genève à ­Londres. «Ici, l’aéroport est à côté et il y a des vols directs pour toute l’Europe. Cela fait gagner beaucoup de temps», souligne Jérôme Schurink.

Enfin, les traders qui débarquent le plus souvent avec femme et enfants ont souvent des exigences assez marquées en matière de scolarisation.

Là encore, Genève et ses écoles internationales sont à même de répondre à leurs besoins. Le seul bémol venu ponctuer cet enthousiasme concerne le logement. La difficulté à trouver rapidement un bien qui corresponde aux besoins des nouveaux arrivants est la seule ombre au tableau.

Ces ressources cachées qu’on a sous le nez

Editorial | Le pétrole et les matières premières.


Alain Jourdan / La Tribune de Genève / rubrique genève internationale | 14.07.2009 | 23:59


Le pétrole et les matières premières. C’est l’une des facettes les plus méconnues de la Genève internationale. Sans doute parce que c’est un monde discret. Les beaux esprits aiment à dissocier la Genève internationale de l’humanitaire et des droits de l’homme, celle qui bâtit la paix, de celle qui fait commerce avec le monde entier. Opérer cette coupure artificielle revient à méconnaître les règles qui régissent le monde.

Genève se trouve à la croisée des chemins. L’activité de trading pétrolier ne se serait jamais développée sur les bords du Léman s’il n’y avait pas eu l’ONU. Les débats qui s’y déroulent témoignent de l’importance que constituent les ressources énergétiques dans les rapports internationaux.

Il n’y a pas de paix durable, nulle part, sans accords solides sur le pétrole et le gaz. C’est le préalable. Ensuite, c’est l’affaire des traders. Leur métier est compliqué. Il requiert de l’expérience, une bonne connaissance des marchés et un réseau d’experts compétents. Ce que Genève est capable d’offrir.

Il n’y a pas de trading pétrolier sans banque, sans cargo, sans ­contrôleur, sans cabinet d’avocats international et sans assureur. Pendant longtemps, Londres a eu la haute main sur cette activité très lucrative. Depuis une dizaine d’années, la place de Genève se montre plus attractive.

Pour des raisons historiques, techniques mais aussi parce qu’elle offre une meilleure qualité de vie.

Derrière les écrans des salles des marchés, il y a des femmes et des hommes de toutes les nationalités. La plupart ont fait le choix de venir ici plutôt qu’à Londres ou Singapour. Ce qui les a conquis? Le lac, les stations de ski voisines, les espaces verts, les écoles internationales pour les enfants et enfin l’aéroport si proche du centre-ville, disent-ils. A méditer. Forcément.

Alternative Energy Rebound Attracts Green Investors

07 Jul 2009

Katie Gilbert - Institutional Investor

Patient money managers see profits on the horizon in he alternative-energy sector.

Last summer, as the price of oil was peaking at more than $145 a barrel, legendary oilman T. Boone Pickens Jr. emerged as an unlikely clean-energy pitchman. The 81-year-old investor was trumpeting a novel plan to build a wind farm in his home state of Texas that would produce 4,000 megawatts of electricity, enough to power 1.3 million homes, which he figured would free up natural gas to run cars more cleanly and help slake Americans’ seemingly unquenchable thirst for foreign oil. Just a few months earlier, Pickens had put his money where his mouth was: His Dallas-based company, Mesa Power, paid $1.5 billion for 667 General Electric Co. wind turbines, slated for delivery in 2011 and expected to generate 1,000 megawatts of clean energy. By 2014, Pickens reckoned, the additional turbines he needed would be in place and the initiative, dubbed the Pampa Wind Project, would be fully operational.

Unfortunately for Pickens, gale-force economic winds began blowing in the wrong direction. Credit markets, the lifeblood of large-scale alternative-energy projects, all but locked up. Difficulties in finding a grid to distribute the farm’s electricity and the plunge in oil prices, which sapped investor interest in the project, also created unexpected problems. Pickens was soon compelled to declare his timetable unrealistic.

The feisty Texas billionaire isn’t the only alternative-energy investor whose plans have been disrupted by market turbulence. Although the sector attracted $155 billion in capital in 2008, up fourfold from 2004, investment flows fizzled in the second half of last year as the credit crisis intensified, according to data from London-based research firm New Energy Finance. From the second quarter of 2008 to the first quarter of 2009, asset financing dropped by nearly 60 percent, to $11.5 billion. Venture capital and private equity investments fell by more than half, to $1.8 billion. And public market investment fell off a cliff as valuations collapsed: The WilderHill New Energy Global Innovation index, which tracks 85 clean-energy companies with market caps north of $100 million, fell 61 percent last year, far outpacing the 38.5 percent drop in the Standard & Poor’s 500 index.

"There are going to be good companies with promising technologies that can’t get financing," says Brian Fan, senior director of research for Cleantech Group, a research firm in San Francisco.

Even so, the economic shakeout may ultimately prove to be healthy. "The downturn has felt terrible — in the long run it’s likely essential," says Russell Read, former chief investment officer of California Public Employees’ Retirement System, who left the pension fund in 2008 to co-found C Change Investments, a private equity firm based in Cambridge, Massachusetts, that invests in clean-energy companies. The current economic environment reminds him of the early 1980s, which marked a major turning point for several emerging industries and ushered in roughly two decades of sustained growth. "I believe we’re at such an inflection point today," explains Read, who expects the alternative-energy sector to be among the biggest beneficiaries.

The fundamentals underlying investor interest are hardly a passing fad. Global warming, once the province of obscure scientific debate, has become a mainstream concern, driven by a growing consensus that the world’s dependence on fossil fuels isn’t ecologically — or economically — sustainable. This consensus has sparked new entrepreneurial ferment in the energy sector and attracted a variety of name-brand investors, including venture capital powerhouse Kleiner Perkins Caufield & Byers, which in late 2007 teamed up with Generation Investment Management, a money management firm co-founded by former vice president Al Gore, to "find, fund and accelerate green business," and Khosla Ventures, a venture capital fund run by Sun Microsystems co-founder and Kleiner Perkins alum Vinod Khosla. Many other investors in the venture capital, private equity and hedge fund arenas have followed their lead in search of profit.

Now a wave of government stimulus money is poised to wash over the alternative-energy industry. Of the $2.6 trillion in funds pledged by the Group of 20 nations to revive their faltering economies, roughly $400 billion is earmarked for alternative-energy projects, according to Cleantech.

The $787 billion U.S. stimulus package, which will funnel more than $70 billion into alternative energy, is the largest national outlay in absolute terms, slightly outpacing China’s $67.2 billion in "green stimulus." Signed into law by President Barack Obama on February 17, the spending package allocates $11 billion for modernizing the electricity grid, $6.3 billion in grants to help local governments increase energy efficiency, $2.5 billion for energy-efficiency and renewable-energy research and $500 million for training workers in renewable-energy-related fields. The stimulus package also offers a 30 percent investment tax credit to alternative-energy manufacturers and homeowners who install energy-efficient technology.

Observers expect renewable-energy mandates to also spur growth in the sector. Late last year the European Union finalized a binding commitment to generate 20 percent of its power from renewable sources by 2020. In the U.S. the American Clean Energy and Security Act was passed by the House of Representatives in June. The legislation mandates an 80 percent cut in U.S. greenhouse gas emissions by 2050 and requires electricity providers supplying more than 4 million megawatts of power to produce at least one fifth of it from renewable sources by 2020. It also establishes a cap-and-trade system that grants emissions allowances to companies, which can then trade them. The legislation now faces a contentious battle in the Senate, where several other climate bills are also being crafted.

"Environmental regulation is the new alpha," asserts Peter Fusaro, chairman and founder of energy consulting firm Global Change Associates, based in New York City, and founder of the Energy Hedge Fund Center, a Web site that maintains a directory of hedge funds investing in the alternative-energy sector. "The regulatory certainty provides the financial certainty, and then a lot more people deploy capital in the sector."

There are some promising signs that the worst of the downturn may be over. Even though investment has slowed dramatically, 2008 marked a tipping point: For the first time power capacity projects sourced from clean energy attracted more capital than did fossil fuel technologies ($140 billion versus $110 billion). In addition, investment flows may have bottomed out. In early June, New Energy Finance reported that second-quarter global clean-energy investments had already outpaced those in the previous quarter. The jump in activity was fueled in part by successful secondary stock offerings worth $2 billion from a number of leading companies, including Denmark’s Vestas, the world’s largest maker of wind turbines, and SunPower Corp., based in San Jose, California, which develops solar energy technology.

Pickens, for one, is ready to get back to work on his wind project, although the plan has been "scaled back and put into phases," says Ray Harris, Mesa Power’s president and CEO. General Electric has agreed to delay delivery of the wind turbines, but Harris won’t say when he expects them to be up and running. Still, he is working with GE to look for other, smaller wind projects around the U.S. to support together. Notes Harris, "We’re seeing lots of projects out there in need of turbines and in need of capital."


Alternative energy first burst into the U.S. consciousness in the wake of the OPEC oil embargo in 1973. The sector got a boost a few years later when the journal Foreign Affairs published an influential essay by a young physicist and environmentalist named Amory Lovins, who articulated a vision of what he called a "soft energy path" — a future where renewable resources would replace the U.S.’s "hard energy path," defined by its reliance on foreign fossil fuels and nuclear power.

Jimmy Carter, elected president a year after Lovins’s essay appeared, embraced these ideas. In a televised speech on the energy crisis, wherein he laid out his plan to create the U.S. Strategic Petroleum Reserve and the U.S. Department of Energy, Carter famously called for shared sacrifice and conservation, but he also vowed to harness "permanent renewable-energy sources, like solar power." Two years later he installed solar panels on the roof of the White House and unveiled a plan to power 20 percent of the U.S.’s electricity needs using renewable sources by the year 2000. But as the oil shocks receded and Ronald Reagan entered the White House, Carter’s clean-energy policies — along with the White House solar panels — were dismantled.

Over the next couple of decades, the nascent solar and wind power industries went through a series of booms and busts as tax incentives came and went. At the same time, according to researchers at Resources for the Future, a Washington think tank, the deregulation of natural gas and oil, the falling costs of conventional energy production and the competitiveness of the world petroleum market all contributed to a decline and stabilization in oil prices, which hindered the adoption of alternative-energy technologies.

Even so, a consensus was building among scientists and policymakers that global warming posed a threat to the environment, culminating in the creation of the Kyoto Protocol, which was adopted in 1997 and became legally binding in 2005. The climate pact imposed limits on emissions of carbon dioxide and other harmful gases, marking a watershed moment even though the U.S. was notably absent from the list of signatories, with the Bush administration arguing that the agreement was flawed. (The U.S. will be at the table this December, however, when signatories are supposed to agree on a successor plan to the Kyoto Protocol at a United Nations confab in Copenhagen.)

Large corporations also led the charge. A few months after the Kyoto Protocol took effect, GE rolled out its "ecomagination" initiative, vowing to decrease pollution generated by its products and increase spending on clean-technology research and development. That same year retailing giant Wal-Mart Stores unveiled an ambitious plan to "green up" its operations, promising to spend $500 million a year to reduce greenhouse gases by 20 percent within seven years, shrink energy use in its stores by nearly a third and double the fuel efficiency of its truck fleet in ten years, among other goals.

With eco-conscious governments and corporations eager for new technologies, investors leapt into action. In 2005, $60 billion in new capital was dedicated to the alternative-energy sector, a 73 percent jump from 2004 and nearly three times the average increase over the previous two years. "There was a recognition by entrepreneurs and investors that we had a couple of big problems to solve," says Cleantech’s Fan. "How do we wean ourselves off coal for power generation? And how do we reduce our dependence on oil for transportation?"

The still-fledgling solar sector was among the biggest beneficiaries of this newfound interest. In several European countries, most notably Germany, solar power got a lift from the adoption of "feed-in tariffs," which require an electric utility to spread the higher cost of renewable energy across its entire customer base, making switching to clean-energy sources cost-effective for end users. Germany’s Q-Cells, today the largest producer of photovoltaic cells, went public in 2005 with backing from New York–based Good Energies, a private equity firm focused on renewable energy that oversees $2.4 billion.

Over the next two years, growing political and environmental awareness and plentiful investment capital yielded a veritable clean-energy boom. In 2007 investment in the sector jumped to $148 billion, more than double the total just two years earlier. That same year 19 percent of all new power capacity added globally came from renewable sources, nearly twice the level in 2005.

Even though investment in alternative energy began slowing in the second half of last year as the financial crisis heated up, 2008 was still a banner year. Wind energy, the most mature alternative-energy source, attracted $51.8 billion, including nearly half of all the asset finance capital deployed in the sector last year. Solar energy, which is slightly less mature, attracted $33.5 billion in venture capital and private and public equity. Through last summer capital was plentiful: William James, co-founder and co–managing director of RockPort Capital Partners, a clean-tech venture capital firm in Boston, says that when his firm set out in mid-2008 to raise a new fund to invest in alternative-energy technologies, it intended to shut the door at $400 million but instead took in $453 million. "We could have raised $700 million or $800 million, we were so oversubscribed," he says.


Capital may be a lot scarcer these days, but investors are undeterred. James, for one, has seen tough times before: When he and his five co-founders launched RockPort in 2000, the term "clean tech" hadn’t yet been coined. All of the partners had backgrounds in energy, renewable power or commodities finance and were inspired to invest in the sector by the growing environmental consciousness sweeping Europe at the time. They decided to focus their capital and know-how on three areas: energy and power, advanced materials, and process and prevention technologies — and branded their niche "anchor technology." Not only did the name not stick, it also failed to inspire interest from institutional investors.

"If we went to any endowments or big investors, they would say, ‘No, this is never going to work; we’re not believers in the green movement,’" recalls James. But the partners stayed with it, ultimately growing their firm to $850 million in capital as their enthusiasm caught on in the investment community. Today the firm ranks with Kleiner Perkins and Khosla Ventures as one of the most active clean-energy investors, with the bulk of its money in solar and wind power. In 2008, for instance, the firm invested in Fremont, California–based Solyndra, which has developed photovoltaic systems that are cheaper and more powerful than rival solar technologies.

Specialty firms aren’t the only big players that have been attracted to the sector. Bryan Martin, co-head of the U.S. private equity unit at D.E. Shaw & Co., a global hedge fund firm that oversees $30 billion across a variety of strategies, says that his group dedicates about one third of its time to alternative-energy investing and has been active in the sector for more than five years. Martin welcomes what he sees as a return to a more rational environment. "The fast money and the hype are not always helpful," he notes.

Although D.E. Shaw also invests in the public equities, debt and convertible bonds of alternative-energy companies, Martin believes that private financing offers the most attractive risk-adjusted returns. His team focuses on finding projects that offer a bigger payoff because they appear difficult to execute. "We try to do the work to understand whether the difficulties can be overcome," he explains.

A case in point is a wind farm project that D.E. Shaw recently agreed to finance on Maui in Hawaii, where energy must be shipped in and is thus relatively expensive, helping make wind power attractive. The project hadn’t yet been financed because locals feared that the turbines would imperil Hawaii’s state bird, the nene. But the firm studied the geese’s flight patterns and determined that the species wasn’t prevalent enough near the proposed site to be at risk.

D.E. Shaw is a big backer of wind power in both Hawaii and the lower 48. The firm is an investor in First Wind, a Newton, Massachusetts–based wind energy company. Among its 36 projects in ten states, First Wind recently completed $375 million in financing for a 200-megawatt wind venture in Utah that will supply electricity to Southern California. Another of D.E. Shaw’s portfolio companies, Deepwater Wind, is focused on developing offshore wind farms in markets where it is difficult to construct new power plants.

"This is not a traditional leveraged buyout where one can work on a deal for six months, close and own a big company," points out Martin, reflecting on the challenges of financing large-scale wind energy projects. "It may take three to five years to develop."


Gaps in market prices and imbalances in supply and demand are what attracted Boston-based Denham Capital Management to the alternative-energy sector. Riaz Siddiqi, managing partner at the $4.3 billion private equity firm, says he was drawn to the profit that could be made from what he calls a "value-dislocation paradigm."

The South African energy market is a case in point. Last year the supply of coal energy in that country hit a wall and South Africa was forced to cut industrial energy consumption by as much as 15 percent. In late 2008, sensing an opening for renewable power, Denham Capital invested in BioTherm Energy, a South African company that builds and operates renewable- and clean-energy projects. BioTherm converts waste gases from industrial processes into electricity, which can be sold or fed back into the national power grid, and plans to build a number of small power plants in South Africa in the coming years.

Like Denham Capital, C Change is looking to profit by backing technologies that can shift consumption from traditional to renewable-energy sources. Co-founder Read first became interested in alternative energy during the Carter era, when he was in high school and studying photovoltaics, which focuses on converting sunlight into electricity, a cornerstone of the solar industry. Read ultimately pursued a career in finance but has returned full circle to his earlier passion. C Change is looking to invest from $20 million to $80 million in alternative-energy companies and hopes to take an active role in the engineering and development of the underlying technologies. The goal, Read says, is to help portfolio companies scale up and achieve critical mass.

Last November, C Change announced its first major investment, in a firm called NC12, which formed a joint venture with an as-yet-undisclosed utility company to convert coal and petroleum coke from oil refineries into natural gas using a proprietary process that is essentially free of harmful emissions. When the final phase of the project is completed in 2012, the facility will produce the equivalent of 7 percent of current U.S. natural-gas imports, according to C Change.

The firm is also positioning itself as an adviser to cities and on green projects worldwide. For example, it is in discussions with the South Korean Ministry of Knowledge Economy about partnering to create a private equity vehicle that will help internationalize the country’s technologies and bring the most promising non-Korean technologies to the nation, whose heavy industries have an intense demand for energy and materials. Read says that C Change will likely invest several hundred million dollars in South Korea–related projects over the next few years. "We are looking at similar arrangements with local partners in other regions," he adds.

Smaller hedge funds have gotten into the clean-energy investing game too. The Energy Hedge Fund Center lists 97 pure-play funds that invest primarily in the space. Rob Romero, founder of Connective Capital Management, a hedge fund that oversees $108 million in assets, 40 percent of which are dedicated to alternative energy, says that the sector’s volatility plays to hedge funds’ strengths. In 2001 a voice mail company that he had co-founded, eVoice, was sold to America Online, and he began exploring venture capital opportunities in alternative-energy technologies such as solar power and advanced batteries.

"What I found was that with venture you can only go long," explains Romero, who founded Connective Capital in 2003. "Frankly, many of the things that I saw I would rather have shorted."

In October 2007 he launched the Connective Capital Emerging Energy fund, which focuses solely on alternative energy. The small fund, which manages just $7 million and is still being incubated internally, lost 21.4 percent last year, versus a 3.6 percent gain for the firm’s flagship fund. Still, the new fund has rallied in 2009, climbing 10.3 percent in the first five months of the year. Romero says that Connective Capital’s investments in wind turbines and solar technology have been the most fruitful. For example, his position in Nasdaq Stock Market–listed A-Power Energy Generation Systems, which supplies wind turbines to China, has more than tripled since he bought the stock in March, although the shares fell after worse-than-expected first-quarter results were released in June.

To the casual observer alternative energy may appear to exhibit all the foibles of a textbook boom-and-bust industry, taking off as investor excitement catches fire only to overextend itself and crash. But many longtime industry observers see the current downturn differently, as a mere blip on the road to wider acceptance of alternative-energy technologies — and bountiful profits for early backers. "Some thought the sector was going to blow up and go away," notes RockPort Capital’s James. "But it’s our guess that clean tech is going to eclipse other spaces like information technology and biotech."

Is Climate Change The Next New Thing In Investing?

07 Jul 2009 – Institutional Investor
Jeremy Lovell
As countries step up efforts to combat climate change, investors are increasingly looking to exploit the opportunities and minimize the risks of a low-carbon future. Our special report examines the challenges of profiting from global warming.
Is climate change the next new thing in investing? The issue of global warming is moving up the political agenda as the Obama administration pushes for the introduction of a cap-and-trade scheme to limit U.S. carbon emissions and governments around the world seek to reach a new agreement by the end of this year to contain greenhouse gases. There is no guarantee that these initiatives will succeed, especially in the short run. But climate change promises to exert a growing influence on investment decisions, from whether to fund the development of alternative-energy sources like wind and solar power to how to value the big carbon-emitting industries like automobiles, steel and utilities.

"Technology is something that has impacted every single industry on the planet," says Jan Babiak, global head of climate change and sustainability services at Ernst & Young. "Low-carbon transformation is very similar. Every industry, every household, every government, every country, every part of society will be impacted by it."

Some 800 funds worldwide, managing $95 billion, focus on climate change or clean energy, according to New Energy Finance. The London-based consulting firm, along with DB Climate Change Advisors, an arm of Deutsche Asset Management, recently surveyed more than 100 institutional investors managing a total of more than $1 trillion and found that 75 percent of them expected to increase investments in clean energy by 2012.

Recent programs undertaken by many countries to restart their economies are giving an added boost to the sector. Deutsche estimates that $106 billion of the U.S.’s $787 billion stimulus package is earmarked for spending on energy conservation, renewable energy, mass transit, a smart energy grid and related areas. The European Union has committed $60 billion to similar initiatives.

To be sure, investment opportunities in climate change depend significantly on the price of energy. The surge in oil prices to more than $145 a barrel last year made many alternative-energy sources economically viable and conservation measures compelling. Carbon’s impact on corporate bottom lines dwindled when oil prices collapsed, though. The HSBC Climate Change index, which tracks about 350 stocks that are expected to benefit from climate change, outperformed the MSCI World index by more than 60 percentage points between January 2006 and May 2008, but it gave up most of its gains over the following five months. The rebound in oil prices to $70 a barrel in recent months promises to provide a fresh impetus.

More and more, governments are seeking to impose rules curbing carbon emissions at national, sectoral and even corporate levels through measures ranging from cap-and-trade plans to energy-efficient building requirements to vehicle exhaust limits.

The EU led the way, with the introduction of its Emissions Trading Scheme in 2005. Australia and New Zealand are also considering cap-and-trade systems to limit carbon emissions. In the U.S., where Congress is debating such a program as part of an energy bill, ten Northeastern and Midwestern states have already introduced carbon trading and emission limits under the Regional Greenhouse Gas Initiative.

"When a price gets put on carbon, what we do for a living is going to be important in bringing capital to solutions," says Kevin Parker, CEO of Deutsche Asset Management in New York. Deutsche, which sees climate change as a megatrend that will have a major effect on investment activity in coming decades, drew attention to the issue in June by launching a carbon counter — a real-time indicator showing the estimated levels of greenhouse gases in the atmosphere — on a giant billboard outside New York City’s Pennsylvania Station.

Carbon trading volume rose 37 percent in the first quarter of this year from the previous quarter, to 1,927 million tons, but the value of those trades declined by 16 percent, to $28 billion, reflecting weaker energy prices, according to data from New Energy Finance.

"Climate change has hit first in companies that have significant direct emissions — particularly in Europe, because of the Emissions Trading Scheme — so we are talking about utilities, steelmakers, cement and so on," says F&C Investments associate director Vicki Bakhshi, who covers the oil and gas and insurance industries for the London-based money management firm and heads its climate change program. "Every equities analyst worth their salt who is analyzing one of these companies will, as a matter of course, incorporate carbon emissions as part of their evaluation."

Rory Sullivan, head of responsible investment at Insight Investment Management in London, argues that it is misguided to assume that the size of a company’s carbon footprint equates directly to its climate risk and ability to profit from climate change — and, therefore, to its share price. "Where climate change or carbon liabilities are material, it is already in the numbers," he asserts. "The really interesting issue is the strategic one — to what extent are companies looking further into the future and looking at their supply chains? That is where it is less clear-cut. It is an open question as to how much investors are really analyzing those issues at the moment."

A recent report by the Carbon Trust, an independent agency set up by the British government to advise businesses on climate change, underscored the potential for carbon to have a big impact on corporate valuations. The report focused on seven global sectors, with a current combined market value of some $7 trillion, where it said that climate change regulation had the potential to either generate new profits or impose new costs. For example, in the aluminium sector, it said, companies that took early action to reduce their carbon footprint could increase their market valuations by as much as 30 percent, whereas those that did not risked seeing their valuations drop by 65 percent. For the auto industry the range extended from +60 percent to –65 percent; in building materials the potential value change ranged from +80 percent to –20 percent.

"In most cases, carbon is just one factor among many in an investment decision," points out Tom Curtis, global co-head of DB Climate Change Advisors. "A lot of it comes down to data, and that is getting better all the time. We are starting to get to the point where an investment manager can start to quantify the carbon exposure."

Some of the best potential investments may be in the U.S., according to a recent research report by Joaquim de Lima and Vijay Sumon, quantitative equity analysts at HSBC in London. (That’s ironic, given the U.S.’s checkered history in the debate about climate change.)

"The U.S. now has an opportunity to become the engine for growth in climate change investing," they wrote. The U.S. accounted for 18 percent of global climate revenue last year, and that figure has been growing at a compound annual rate of 26 percent since 2004 even though the country did not ratify the Kyoto Protocol or enact federal climate change legislation.

The report identifies energy efficiency and low-carbon energy production — in particular solar power — as key potential growth sectors, because they are the biggest beneficiaries of the Obama administration’s economic stimulus package. It also highlights potentially key drivers of activity, such as the need to smarten the electricity grid and improve the energy efficiency of buildings.

Analysts at Deutsche forecast that investment in clean energy, energy efficiency and other climate change sectors could hit $650 billion a year over the next 20 years, up from $150 billion in 2007.

"We are actively engaging in developing the low-carbon technologies," says Curtis. "We are also quite excited about energy efficiency. We think it is low-hanging fruit." Deutsche believes that the most promising investment targets are makers of insulation and smart meters as well as developers of new window technology, all of which increase energy efficiency in buildings; low-carbon transportation, such as electric car technology; and renewable energies like solar and wind power.

The Universities Superannuation Scheme, the second-largest U.K. pension fund, with £23 billion ($38 billion) under management, takes carbon emissions into consideration when making investments. "We look at how companies are managing a shift to a long-term environment where the cost of carbon is likely to be higher and there will be political and policy imperatives to reduce emissions, and what that means for them," explains David Russell, co-head of responsible investment at the fund.

USS is currently talking with a company in India about plans for the possible introduction of carbon emission regulations in that country. "We are asking the company how it is looking at this issue over the next ten, 15, 20 years, where infrastructure developed now will be around for potentially decades; how they are factoring in the implications of a cost of carbon and emission reductions, or the physical impacts of climate change, into their developments now," says Russell, who declined to identify the firm.

Although some organizations are taking steps to limit their carbon footprints, others are doing more talking than acting. "Companies are starting to market themselves around their environmental performance," notes Seb Beloe, director of responsible investment at Henderson Investments in London. "Three or five years ago, that wouldn’t have happened. The need to look behind the message has always been there, but it is much more of an issue now."

Henderson has avoided investing in corporations whose green spin it deemed to be well ahead of commercial reality, says Beloe. One such case is Japan’s GS Yuasa Corp. The company’s share price soared recently after it drew attention to its production of lithium ion batteries for electric cars, but Beloe point out that the overwhelming majority of GS Yuasa’s output is lead acid batteries. And despite the fact that Brazil’s Cemig is part of the Dow Jones Sustainability index, Henderson has steered clear of it as well because of its involvement in a controversial dam in the Amazon.

Henderson is also prepared to lobby businesses for changes in behavior. Beloe cites the case of China’s Suntech Power, a maker of solar power equipment whose share price tanked last year after the Washington Post reported that the company was dumping its waste on farmland. Henderson prodded Suntech to address the issue, and it responded by putting tough environmental clauses in its supply contracts.

Investors need to keep a close eye on regulatory and political developments. Ernst & Young estimates that 250 pieces of major climate-related legislation have been introduced around the globe in the past year alone. The outcome of the United Nations talks in Copenhagen this December could also have a significant impact on markets in the short term. But whatever happens in coming months, the effect of climate change on the market is likely to grow.

"We are well positioned for whatever happens at Copenhagen," says Henderson’s Beloe. "If it succeeds, then tougher targets will come in over a shorter time period. If Copenhagen fails to come up with a strong agreement, international renewable companies would be hit, and some of the carbon traders would definitely be hit. But it is not going to derail the whole thing."

WHEB launches sustainable investment fund

WHEB Asset Management has launched a sustainable investment fund focusing on worldwide megatrends.

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The IM WHEB Sustainability fund will invest globally and offer investors exposure to three main megatrends - water, climate change and demographics.

It will invest predominantly in international and UK companies that provide solutions to major global issues, such as water resource shortages, climate change and ageing populations.

The company said the fund would aim to take advantage of a variety of market conditions and position its portfolio defensively or towards growth stocks.

Under normal circumstances, the fund will hold cash on deposit up to 10 per cent of the value of the fund.

But WHEB said the managers may increase cash holdings to more than 10 per cent, which, in the first six months following launch, may be the case. The fund may also invest in derivatives to reduce risk.

The fund will be managed by Clare Brook and Nicola Donnelly, who will be supported by the WHEB research and advisory teams, which include leading figures in the environmental and financial industries.

According to WHEB, although many of the companies operating in the areas of focus for the fund have fallen sharply over the last year, they are now benefiting greatly from global stimulus packages.

With this in mind, the managers said now was a good time to invest in quality, established businesses at the heart of the "third industrial revolution" - or those companies that address clean energy, water infrastructure, efficient resource use and shifting demographics.

Brook said: "I have been investing in environmental companies since 1990, but I have never seen such an exciting combination of compelling valuations and actual change in legislation that is driving profitability."

Donnelly said she was "extremely confident" in the launch due to timing factors, market conditions and the underlying support they had at WHEB.

Fund Facts:

Minimum investment: £3,000

Initial charge: 5 per cent

AMC: 1.5 per cent

Pictet unveils agriculture-focused fund

Pictet & Co on Wednesday declared that its fund distribution firm, Pictet Funds (PF), has unveiled the PF (LUX)-Agriculture fund, according to a report in Eye of Dubai.

The new vehicle, which will be available to institutional, private banking and retail investors in select countries worldwide, will be run by Gertjan van der Geer, senior investment manager at the Swiss private bank.

Blue Marble Capital Launches Cleantech Hedge Fund

May 8, 2009
Canadian asset manager Blue Marble Capital Partners is going ‘green’ with the launch of its first hedge fund. The firm has recently unveiled a cleantech-focused hedge fund that will invest in carbon credits and clean technologies.

The new vehicle, the Carbon Alternative Fund, will be managed by Trevor Giles.

Half of the fund, which will invest globally, will be focused on carbon credits and other carbon-related investments, while the remainder will be invested in public and private clean technology companies, or firms that provide raw materials for these companies.

Blue Marble was formed to provide investors with annual absolute return capital appreciation by managing investments that are expected to benefit from a global transition towards carbon constrained societies, the emergence of global carbon markets, and related transitory resource and commodity imbalances, according to the firm’s Web site.

The new fund is open to Canadian and other international investors, but is currently not open to U.S. citizens.

Blue Marble is also in the process of developing what it believes will be Canada's first carbon-linked note and its first carbon-linked bond.

Eurex to launch four agricultural futures in July

Hedgeweek
Thu, 28 May 2009


The international derivatives exchange Eurex is expanding its product range to include the agricultural products asset class.

Trading will start in July 2009 with four new futures based on the agricultural products hogs, piglets and potato crops (London potatoes and European processing potatoes).

All four futures are settled in cash. Market price indices act as underlyings which aim to increase market transparency.

Peter Reitz, member of the Eurex executive board, says: 'Our entry into the segment of agricultural derivatives is the systematic continuation of our strategy of covering all important asset classes with our own products. We aim to bring the well known advantages of our global network and central clearing system into this market that has had a strong national focus thus far. The strengths of the Eurex business model will accelerate international growth in this segment considerably.'

Plans are underway to expand the product offering of agricultural derivatives in 2010.

Hedge Funds Bet Most Since August on Commodities

By Chanyaporn Chanjaroen

May 26 (Bloomberg) -- Hedge funds are making the biggest bet in nine months that commodity prices will rise as the global economy rebounds from its steepest slump since World War II.

The CHART OF THE DAY shows an index of the net long position in U.S. commodity futures, or bets prices will rise, held by hedge funds and other large speculators. The index, consisting of 20 raw materials monitored by the U.S. Commodity Futures Trading Commission, rose to its highest since August.

The gain “indicates further willingness for investors to take on asset classes which they were earlier cautious of,” said Kevin Norrish, an analyst at Barclays Capital in London. The index plunged from a peak of 1.37 million in February last year to as little as 86,220 in December.

Sugar and corn had the largest net-long positions by the week ended May 19, while investors held the largest net-short positions in natural gas and copper.

“Agricultural products are not going to be as vulnerable to the current economic retrenchment as things like metals or oil,” Norrish said.

The Reuters/Jefferies CRB index of 19 raw materials rose 6.3 percent this year, after a 36 percent decline in 2008.

(To save a copy of the chart, click here.)

To contact the reporter on this story: Chanyaporn Chanjaroen in London at

Impax AUM down 19 pct, cautiously optimistic on H2

05/13/2009 HedgeWorld


* Cites weak equity markets

* H1 profit before tax falls to 1.3 mln stg

* Aims to maintain annual dividend of 0.35p/shr

* Sees expansion opportunities in Asia


(Adds CEO's, COO's comments, updates share movement)

By Shivani Singh

BANGALORE, May 13 (Reuters) - Environmental investment manager Impax Group Plc said assets under management declined 19 percent in the first half of its financial year due to weak equity markets but it is cautiously optimistic about the second half.

"We are pleased with the last six months and cautiously optimistic about the next period and very optimistic about the medium to long term," Chief Executive Ian Simm told Reuters in an interview.

Impax invests in sectors such as renewable energy, water treatment and waste management that may benefit from government environmental initiatives globally.

The company said assets under management fell to 889 million pounds ($1.35 billion) as of March 31 from 1.10 billion pounds on Sept. 30, but had recovered to 986 million pounds by April 30.

Net outflows were about 48 million pounds in the period, characterised by "a small percentage of reductions in investments (by clients) rather than clients walking away completely," Chief Operating Officer Charlie Ridge told Reuters.

Impax posted a first-half profit before tax of 1.3 million pounds, hurt by an increase in operating costs. It reported a profit of 1.6 million pounds before tax a year ago.

Revenue rose 11 percent to 5.5 million pounds, including exceptional non-recurring fees of 945,620 pounds, for the six months ended March 31.

Impax, which paid a 0.35 pence maiden annual dividend for the year to last September, plans to maintain the dividend at the same levels as last year, CEO Simm said.

The company did not propose an interim dividend as it plans to have a single annual dividend subject to market conditions.


EXPANSION PLANS

Impax, which has 32 employees, plans to add another 10 to 15 people in London over the next couple of years, CEO Simm said.

The company expects to grow organically and is not actively looking at acquisitions as a strategy for growth.

Its funds, including Impax Environmental Markets Plc , have the capacity to double the amount of money they manage, Simm said.

Impax, which has operations in London and Hong Kong, associates in Europe and partners in the United States and Japan, expects to expand activities in Asia over the next 12 months.

The company is in discussions regarding research and distribution opportunities including selling funds to Indian nationals, institutions and non-resident Indians with a financial institution in India, Simm said.

At 1230 GMT, shares of Impax were up 5 percent at 25 pence on the London Stock Exchange. The shares have gained about 19 percent in the past six months.

($1=.6582 Pound) (Editing by Mike Miller)

((shivani.singh@thomsonreuters.com; +91 80 4135 5800; Reuters Messaging: shivani.singh.thomsonreuters.com@reuters.net)) Keywords: IMPAX/

Investir dans l’énergie reste attrayant

Le Temps - Par Youri Vorobiev*
Même en phase de baisse des cours du brut, l’efficience énergétique et la sécurité de l’approvisionnement rendent les placements dans les énergies alternatives attrayants
Les cours élevés du pétrole sont considérés comme un motif d’investissement dans les énergies alternatives. Depuis son record historique l’été dernier, le prix du baril a reculé d’environ deux tiers. La perte de compétitivité qui s’en est suivie pour les énergies alternatives a remis en cause les investissements dans ce secteur.

Efficience: potentiel élevé

Sous l’angle des coûts, les technologies telles que l’énergie solaire, éolienne et hydraulique sont nettement moins intéressantes que les énergies conventionnelles. Toutefois, les entreprises spécialisées dans l’efficience énergétique représentent aussi un segment au sein du secteur de l’énergie. Ces entreprises basent leur activité sur un constat: 80% de l’énergie produite est perdue avant même d’être utilisée. Par conséquent, la réduction des pertes d’énergie au cours de la production, de la transformation, du transport et de la consommation peut considérablement améliorer la consommation et les coûts de l’énergie, même lorsque le pétrole est bon marché. Les entreprises qui cherchent à optimiser la production d’énergie ou la transformation de l’électricité et son transport offrent donc un potentiel considérable.

La sécurité énergétique est aussi un thème majeur. Comment couvrir les besoins croissants en énergie de la planète et réduire les risques de rupture d’approvisionnement? La réponse à cette question est à rechercher du côté de la diversification et trouve sa source dans les facteurs qui mettent en péril la sécurité énergétique. En effet, la forte concentration des ressources d’énergie fossiles constitue l’un des plus grands risques à cet égard: les réserves d’énergie conventionnelle se situent dans un nombre limité de pays. Ainsi, les pays membres de l’OPEP disposent des trois quarts des réserves de pétrole mondiales contre 7% pour les pays de l’OCDE qui consomment pourtant 60% du pétrole produit. La situation est similaire pour le gaz dont plus de la moitié des réserves se concentre dans trois pays: Russie, Iran et Qatar alors que les pays de l’OCDE monopolisent plus de 50% de la consommation mondiale.

Quelques grands pays de l’UE ont pris l’entière mesure de cette dépendance en décembre dernier lorsque le conflit autour du gaz qui a opposé l’Ukraine à la Russie a entraîné une rupture de l’approvisionnement en gaz en plein hiver. La concentration des réserves d’énergie conventionnelles constitue l’un des principaux risques pour la sécurité énergétique mondiale. Toutefois, la menace croissante que représente le changement climatique n’est pas non plus négligeable. Les conditions climatiques extrêmes qui, selon les experts, n’iront qu’en s’aggravant, sont un risque à prendre très au sérieux. Les récentes catastrophes climatiques ont démontré toute l’importance de la garantie de la sécurité énergétique qui sera assurée au mieux en diversifiant les sources d’énergie et en ayant recours à des technologies plus efficientes. Dans ce contexte, les ressources renouvelables telles que l’eau, le vent, le soleil ou la biomasse jouent un rôle essentiel. Certes, ces sources d’énergie ne remplaceront pas les formes traditionnelles d’énergie à court ou moyen terme, mais un mix d’énergies pourra contribuer à la sécurité énergétique.

Cherté du brut inévitable

L’évolution de l’offre et de la demande en énergie est aussi déterminante pour l’attrait de ces investissements. Les réserves mondiales de ressources limitées telles que le pétrole brut, le gaz naturel ou l’énergie atomique commencent à s’épuiser alors que leur consommation augmente massivement depuis 100 à 150 ans. L’Agence internationale de l’énergie (AIE) prévoit une hausse de la demande en énergie primaire de 45% d’ici à 2030. La Chine et l’Inde consommeront à elles seules plus de la moitié de cette énergie. L’augmentation des besoins en pétrole dans le monde est essentiellement alimentée par le secteur des transports qui a prouvé par le passé sa quasi-insensibilité aux fluctuations du prix de l’or noir. Une hausse des cours du brut est donc inévitable. Ces perspectives augmentent un peu plus encore l’attrait des investissements dans les énergies renouvelables. Si l’on ajoute à cela la diversification énergétique qui devrait permettre de combler les lacunes de l’offre d’énergies traditionnelles tout en réduisant les risques liés à l’approvisionnement en énergie, le rôle décisif que les énergies alternatives seront amenées à jouer à l’avenir s’en voit particulièrement renforcé.

* Gestionnaire du Vontobel Fund – Global Trend New Power.