About 50 people recently filled a meeting room at the Laurel Point Inn to learn about investing in the world’s hottest growth industry: clean energy.
Phillip de Weck, with Pictet Asset Management out of Switzerland, presented the ins and outs of investing in the exciting but risky renewable energy, energy efficiency, and “low-carbon” sectors.
The products of Pictet are now available in Canada through Toronto-based Criterion Investments and can be added to one’s portfolio locally through The Pinch Group. The fund is called Global Clean Energy Fund and includes approximately 60 companies. There are three Canadian companies in the mix, Canadian Hydro Developers, out of Alberta, as well as Plutonic Power Corporation and Westport Innovations, both based in B.C.’s Lower Mainland. Minimum investment starts at $100,000.
Carmanah Technologies is one of the two publicly traded clean-energy companies based in the Victoria region. Though their stock is not presently included in the Criterion package, it is available with Merrill Lynch’s New Energy Technology Fund, a cluster of about 35 companies committed to sustainable energy development. The other company is Earthfirst Canada, formerly Earthfirst Energy, an emerging force in Canadian wind-power development.
The fundamental drivers that provide stability and value are becoming increasingly solid, if somewhat intimidating in their descriptions. Climate change is the number one factor, as populations, governments, and industries around the world awaken to the house fire that has resulted from the release of trillions of tonnes of carbon dioxide and other gases into earth’s finite atmosphere.
A second major consideration is emerging supply constraints, as the readily available deposits of oil, natural gas, and other fossil fuels are depleted. Independence from foreign sources of energy is the third factor making a positive impact on clean-energy development, as most renewable-energy technologies generate power regionally by design.
The Global Clean Energy Fund by Criterion is diversified between three areas:
“Carbon-free” at 60 per cent of holdings; “low-carbon” investments, such as natural gas and biomass energy, at 20 per cent; and energy-efficiency developers at 20 per cent. It is also well diversified in terms of geography and nationality and in its balance between technology development and power-generation projects.
The risk-tolerant investor worldwide is already reaping the rewards of recognizing the current realities and buying into this important group of industries. Presently the worldwide investment in clean energy totals about $70 billion a year, which is forecasted by some market analysts to climb to $225 billion within ten years.