Tue, Mar 19, 2024
A A A
Welcome Guest
Free Trial RSS pod
Get FREE trial access to our award winning publications
Alternative Market Briefing

Other Voices: Decarbonization and fossil fuel's growing weakness

Tuesday, August 25, 2020

By James Jampel, HITE Hedge Asset Management

Warren Buffet said in 1999: "Sometimes, incidentally, it is much easier in these transforming events to figure out the losers. You could have grasped the importance of the auto when it came along but still found it hard to pick companies that would make you money. But there was one obvious decision you could have made back then … and that was to short horses."

Today's "horses" are the most overvalued and vulnerable companies in the carbon value chain - select producers, processors, transporters, refiners, marketers and users of hydrocarbons, along with their suppliers. Given the uncertainty around the future of these businesses, they may never be as valuable as they used to be.

As it navigates a global health crisis, the world has continued its push towards "decarbonization," a global initiative to reduce fossil fuel use and to divest from companies related to hydrocarbons, in an attempt to prevent an even bigger crisis - the devastating effects of climate change. Although society has not yet achieved decarbonization, this inexorable trend provides ample opportunity for institutional investors to profit as the current cracks in the fossil fuel industry will only grow wider:

    1. The structure of the fossil fuel industry means that intense competition will continue.

    Oil, natural gas, NGLs and coal are all for the most part highly fragmented, commoditized, depleting, and capital-int......................

    To view our full article Click here

Previous Opalesque Exclusives                                  
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. KKR raises $6.4bn for the largest pan-Asia infrastructure fund[more]

    Laxman Pai, Opalesque Asia: The New York-based global investment firm KKR has raised a record $6.4bn for its second Asia-focused infrastructure fund, underlining investors' continued appetite for private markets. According to a media release from the alternative assets manager, the figure top

  2. Bucking the trend, top hedge fund makes plans for a second SPAC[more]

    From Institutional Investor: SPACs aren't dead. At least not to the folks at Cormorant Asset Management. The life sciences firm, whose hedge fund topped its peers in 2023, is confident it will match the success of its first blank-check company. Last week, the life sciences and biopharma speciali

  3. Benefit Street Partners closes fifth fund on $4.7 billion[more]

    Bailey McCann, Opalesque New York: Benefit Street Partners has closed its fifth flagship direct lending vehicle, BSP Debt Fund V, with $4.7 billion of investable capital across the strategy. Benefit Street invests primarily in privately originated, floating rate, senior secured loans. The fun

  4. 4 hedge fund themes that are working in 2024[more]

    From The Street: A poor earnings report from Tesla (TSLA) has not hurt the indexes on Thursday. The decline in Tesla stock, which is losing its position in the Magnificent Seven pantheon, is more than offset by strong earnings from IBM (IBM) and ServiceNow (NOW) . In addition, the much higher-t

  5. Opalesque Exclusive: A global macro fund eyes opportunities in bonds[more]

    Bailey McCann, Opalesque New York for New Managers: Munich-based ThirdYear Capital rebounded in 2023, following a tough year for global macro. The firm's flagship ART Global Macro strategy finished the year up 1