June 2010 /// Issue 05 / S
SPONSORED STATEMENT
Investors must seize climate-change potential Climate change should not be seen as a threat, but rather an opportunity to profit from the new wave of technology firms creating solutions for the world’s ecological problems. Investors have too narrow a view on
all come into play to reduce CO2
markets is currently 18% and might rise to 25% as
climate change. Markets overlook the real costs and opportunities in existing
emissions. Aixtron, a mid cap German company, makes the machine tools
new opportunities are found in countries such as China and Brazil that invest in their fragile eco-
business and consumer markets. Impact Funds - Climate Change, the
used to make low energy LED lighting, certainly a growth area. More than half
systems. Joly says: ‘In many countries, there is virtually no water metering. Consumers treat water
Luxembourg-domiciled fund managed by Natixis Asset Management, offers a different perspective. It promises the
its exports are to Asia. In energy production, rather than ‘big oil’ or coal, we consider
like air. But governments know they need to take action if they want to sustain their development.’ Modernising infrastructure and simple jobs such
best ideas in stocks that the market has hydroelectric energy companies like Carlos Joly yet to re-price for environmental reasons. Tratebel Energia of Brazil or Chairman of the Scientific Advisory Committee The thematic fund is not Chesapeake in the US, for obvious benchmarked, yet still appeals to institutional carbon mitigation reasons – but, as with all our stock investors. To date, they have been mainly French selections, we look for solid financials and
as installing water pipes and fixing leaky ones are being boosted by emerging market government stimulus funds. ‘If you think this is action needed in 20 or 30 years, you are very much mistaken. The spending is now, and infrastructure runs to hundreds
insurers, banks and regional banks. Natixis Asset Management is now opening up the
dependable earnings streams. Our purpose is, of course, to generate the kind of returns our investors
of billions of dollars,’ says Joly. The lateral thinking built into the fund’s remit
fund to other pan-European institutions. Its broad diversification and Emerging Market growth appeal are boosted by its performance record since launch
are looking for. In transport, too, railways are a cleaner option, as is maritime and coastal shipping. But road traffic
produces a wide range of more than 500 eligible stocks. Managers Suzanne Sénellart and Clotilde Basselier can call on the advice of the eight scientific
(5/10/09). At the end of April, the fund assets amounted to $138m, and performance since
cannot be ignored. Software companies that manage traffic light systems significantly reduce petrol
committee members for the latest thinking, and data on its three investment themes.
inception was +15% in euros (net of fees). Although this is not an indication or guarantee of future performance or results for the fund, it is a
consumption and their order books are bulging. We also like companies like BYD (Build Your Dream), a Chinese $23 billion cap company that makes lithium
Experts include Pierre Radanne, who headed France’s environment and energy agency (ADEME) and Richard Klein, a senior scientist with the
testament to the past success of the portfolio management team. The Luxembourg fund operates on a simple premise: the risks associated with climate change are already upon us. Extreme weather, pollution and stresses on energy, food and water are very real, says Carlos Joly, head of the fund’s Scientific Advisory Committee. Yet investors still have too-narrow a view. They focus on new technologies, not making the most of what we have already. Joly says: ‘The impact has not been priced in by markets, except in certain niche areas. By concentrating on three key themes of greenhouse gas reduction, adaptation to the impacts of extreme weather events and better use of natural resources, we widen the field, reduce concentration risk, and spread across sectors and geographies.’ The CO2 reduction theme is not just about cutting oil and coal usage. ‘Many investors think too simplistically. There are few names in the solar and wind universe and they are chased heavily by a lot of investors. Pricing of those companies can easily get out of control,’ explains Joly. There are more opportunities in energy efficiency and improving existing power plants. By extension, glazing, insulation, sensors and lighting companies
and nickel rechargeable batteries and is branching out into hybrid cars. Adaptation is the fund’s second theme. Climate change is already affecting business and consumer behaviour. Even before the volcanic ash cloud hit, companies were already making greater use of video-conferencing. The fund is invested in Cisco, the worldwide leader in networking, mastering the transmission of voice and video, as well as data. Cities such as Paris and Barcelona are introducing bicycle hire schemes. No wonder Shimano, the leading supplier of bike gears, is a candidate for inclusion in the fund. The natural resources theme concentrates on water and soil management in an increasingly urban, developing world. Fertilizer companies for improved agricultural output, better logistics getting farm foods to market to reduce spoilage, and sustainable forestry all provide interesting investment opportunities. A great example here is the Brazilian company All America Latina Logistica, which runs 21,000km of railways in Brazil and Argentina – 75% of their business comes from the transportation of agricultural products such as soy, corn and sugar. A focus on emerging markets adds to the fund’s unique proposition. The fund’s exposure to emerging
Stockholm Environment Institute, co author of IPCC reports, and expert in adaptation. Expertise is diverse, as are the opinions shared. ‘Meetings are collegial and always challenging. There are lots of arguments, but all are fruitful and useful,’ admits Joly. The fund mentioned herein is a sub-fund of Impact Funds which is organised as an investment company with variable capital under the laws of the Grand Duchy of Luxembourg and is authorised by the financial regulator (the CSSF) as a UCITS. Natixis Global Associates S.A. is the management company of the fund. Natixis Asset Management, the investment manager of the fund, is a subsidiary of Natixis Global Asset Management and is a French asset manager authorised by the Autorité des Marchés Financiers (Code 1200009, Agreement No. GP90009) and licensed to provide investment management services in the EU. Natixis Global Associates is the global distribution organization of Natixis Global Asset Management, the holding company of a diverse line-up of specialised investment management and distribution entities worldwide. This article is for information purposes only and does not constitute a recommendation or an offer to buy or to sell any security, or an offer of services. Distribution of this document may be restricted in certain countries. The fund is not authorised for sale in all jurisdictions and its offering and sale may be limited by the local regulator to certain types of investors. Please ask your financial advisor if you have any questions. It is the responsibility of your financial advisor to ensure that the offering and sale of fund shares complies with the relevant national law. The fund may not be offered or sold in any country or jurisdiction where it would be unlawful to offer or sell the fund. This is not a prospectus and does not constitute an offering of shares. Please read the prospectus carefully before investing.
Pioneer in SRI with 25 years of experience, Natixis Asset Management is the european expert of Natixis Global Asset Management with around 309 billion euros of assets under management (Source: Natixis Asset Management - Data as of 31/03/2010)