Geneva-based Quaero Capital has launched an Accessible Clean Energy fund managed by Martina Turner and Zoë VanderWolk, aimed at capturing increasing investor interest in the switch to alternative clean energy sources worldwide.
The USD32 million UCITS fund, a Luxembourg domiciled SICAV registered for Pan-European distribution in different countries, will be marketed to institutional and professional investors across Europe and the UK. It is a high conviction, active strategy which strengthens the sector funds offering from Quaero Capital.
Martina Turner joined Quaero Capital in 2017 as a Fund Manager. She is the founder of the Accessible Clean Energy investment strategy, which she set up in 2014. Following extensive experience acquired at Tier-1 financial institutions in equities, business development, and clean energy investments, she trained in solar technology and materials science at MIT seminars, and in microcredit for solar installation at Grameen Bank.
Subsequently, she developed an investment strategy to generate profitable returns investing in companies focused on development, production and sale of clean energy technologies. After over two years of successful tracking, this became the strategy of a structured fund, anchored by a pension fund.
Zoë VanderWolk joined Quaero Capital at the same time as Turner, after many years’ experience as a lawyer in the clean energy sector, including advising on power projects, environmental and carbon markets. With a BA in Statistics from Harvard University, she has worked for Baker & Mackenzie LLP.
The Accessible Clean Energy strategy is supported by a high level Advisory Board, comprised of Georges Dupont-Roc, founder of Royal Dutch/Shell Renewable Energies and former Director of Sustainable Development at Total, who has 35 years of strategic, operational and technical experience across the energy industry.
Nancy Hirshberg is the Founder and Chief Catalyst at sustainability consulting firm Hirshberg Strategic (USA) and former VP for CSR leader Stonyfield Yogurt’s award-winning energy and sustainability programs. Jim Bain Member is a member of the Institute of Chartered Accountants of Scotland with 30 years in the Oil & Gas industry in North and South America, Europe, Africa and Asia.
The Fund aims to reduce carbon emissions by investing in listed fast-growing clean energy stocks. Importantly, the sector is no longer reliant on subsidies or non-profit investments. In a positive self-reinforcing cycle, clean energy technology is getting cheaper as demand grows, which in turn is improving the risk-return profile for investors as economies of scale are realised.
Capital for clean energy development has traditionally been accessible mainly via private equity investment vehicles with long lock-up periods. Public markets are now meeting that capital demand more efficiently. The new fund is an open-ended investment fund offering daily liquidity.
“Clean energy has definitively shifted to an unsubsidised, truly competitive mix of industries,” said Turner. “The cheapest renewables – Solar PV (photovoltaics) and Wind are already cheaper than the cheapest form of conventional power. In addition, storage costs are now so cheap that wind, solar and storage can together provide more reliable baseload power with no intermittency, outages or energy security issues.”
VanderWolk says: “This is the fourth Industrial Revolution. The speed of breakthrough has no historical precedent. It is a global proposition driven by demographics, development and technological change. Innovation has helped reduce costs but barriers to entry are still high. Leading companies now have strong, competitive and profitable business models. The technologies have been tried and tested and are now robust.”
The fund invests across the entire clean energy value chain, drawing from an addressable universe of 650 listed equities. With a typical portfolio of 28-35 stocks selected on a three-year view, the biggest sector allocations are in energy efficiency and energy storage, which comprise around half the portfolio, with the remainder including wind, solar and geothermal energy generation, and equipment manufacturers.
The clean energy sector is particularly well suited to active management, since the technology is evolving so quickly, conventional analysis has been thin and intermittent, and comment has been consistently proved wrong. Careful research and stock selection has so far generated strong outperformance.
For the managers, the provenance and clarity of the fund differentiates it from many others in a rapidly growing sector. It is focused purely on clean energy, where other strategies have diluted that with exposure to related industries like automation or robotics, or by including ‘cleaner’ fossil fuels such as gas or nuclear energy. “These offer little to investors concerned about decarbonisation,” notes Turner.
Quaero Capital is a signatory to the UN Principles for Responsible Investment (UN PRI) and the managers will use their voting rights to encourage the implementation of best practices aiming at improving the business sustainability, soundness and profitability of the companies held in the portfolio on the basis of ESG (Environmental, Social and Governance) criteria.