Sie sind hier:

Home arrow Headlinearrow arrow arrow
AP7 to boost clean tech investments with new Nordic brief Drucken E-Mail
5.03.2010

AP7, the manager of the national default fund in Sweden, is pushing ahead with its investments in clean technology. It plans to commit 3% of its total €9.6bn in assets to a broad range of technologies including energy efficiency and waste management. AP7’s environmental investment programme positions it at the front of the field along with Norway’s Government Pension Fund Global. Using private equity investment specialists, these funds are investing in companies that have a critical role to play in developing low-carbon and resource-conserving products and services. AP7 actually identified the space five years ago and in 2006 conducted a public tender of private equity fund-of-funds (PEFOF). It made its first global commitments through managers Harbour Invest and Macquarie and more recently appointed LGT Capital Partners to oversee a new PEFOF for the Nordic region, notes Richard Gröttheim, CIO at AP7. To date, the fund has invested only a quarter of its strategic allocation in clean technology PEFOFs based on the premise that mounting environmental problems and resource constraints around the world will open the way for investment opportunities that could provide above equity returns.

The clean tech sector encompasses low carbon energy sources in addition to a range of products, services and technologies using natural resources more efficiently, recycling and re-using water and reducing pollution. Global revenues from companies that offer these products and services increased by 75% to €359bn in 2008 and it is set to grow to more than €1.5tr annually by 2020, according to HSBC. Clean tech and energy investments suffered during the recession; however, figures for the second half of 2009 show strong signs of recovery. Gröttheim notes that AP7 postponed committing more money to the sector in 2008 as the fund posted a loss of 36% largely due to its large strategic equity allocation which accounts for 82% of the portfolio. The fund has another 10% strategic allocation to fixed-income and 8% to private equity, including clean technology. As markets recovered in 2009 and AP7 closed the calendar year with a 35% return, the fund resumed investing in clean tech.

 

Challenges and risks


The sector poses a number of challenges which AP7 is attuned to. One risk is investors’ emphasis on high technology while most of the green investments that the world needs, such as sewage works, is not high tech.
Another short-coming is the sector’s focus on small and mid-sized companies with potential for rapid growth. Yet many of the solutions to environmental problems, such as decarbonisation rest with established energy companies that are not seen as having sufficiently high growth potential by some investors. Another central question in the space is when and if countries will come to an agreement over global carbon trading and if they will implement legislation to sustain the market. Such challenges call for a particularly diversified portfolio, notes Gröttheim. “The solution to climate change requires a broad-based set of responses. This means one needs to invest in both new and existing technologies.”

Investment funds in the space also have different risk profiles. Venture capital is for the earliest, most risky stages. Growth capital comes later, when the company has demonstrated it has a commercially viable product or service. With the risks considerably higher than equity, AP7 has more aggressive return expectations over the 10-year life cycle of its clean tech investments. “Our programmes are two to three years old. It is too early to say how well they will do,” notes Gröttheim. “We think private equity in general should outperform global equity by 2-3% over the entire investment cycle and we expect clean tech to add another 2% on top of that.”
 
 
Diese E-Mail-Adresse ist gegen Spam Bots geschützt, Sie müssen JavaScript aktivieren, damit Sie es sehen können

 

Artikel in diesem Zusammenhang

© bfinance. Alle Rechte vorbehalten. Das Vervielfältigen und Verbreiten über bfinance veröffentlichter Inhalte oder das Speichern in Datenbanken außerhalb der Grenzen des Urhebergesetzes ohne Zustimmung von bfinance ist verboten. Diese E-Mail-Adresse ist gegen Spam Bots geschützt, Sie müssen JavaScript aktivieren, damit Sie es sehen können