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Laxman Pai, Opalesque Asia: Canadian asset manager Vivid Capital Management said that its hedge fund Vivid Energy Fund returned 116% in 2020 with bets on solar power and other clean energy stocks.
According to a press release from the Toronto-based asset manager, it has repositioned its energy fund to gain exposure to the clean energy transition since late 2019.
"Focused on navigating the energy transition through the right mix of growth, technological innovation, undervalued hydrocarbons, and supply chain raw materials, the recalibrated Vivid Energy Fund will continue to operate under an open energy and transportation-focused mandate," said the release.
The fund allocates capital across the energy industry in such a way that reflects both where the global energy market is today, through free cash flow generative hydrocarbon industries, and the direction it is heading in the future, through growth-oriented renewables and zero-carbon energy and transportation, it added.
"By 2050 the world's energy demands are expected to be more than 50% greater than they are today. To meet that demand, we need to use all energy sources in their most efficient and effective applications," James Bradford, Vivid Capital Founder, and Sr. Portfolio Manager said.
"This will spawn some very high growth industries in renewables and spectacular investment opportunities along the way, but at the same time it appears as though in 2050 we'll be using about the same amount of hydrocarbons as we are today, which potentially offers decades of free cash flow from the hydrocarbon industry which is also attractive," he added.
Globally, more than half of GDP, 2.6 billion people, and a quarter of total carbon emissions are covered by a national net-zero target - and over time those figures are only going to rise.
The investment opportunity this global transformation has created is historic in scope; Vivid is poised to capitalize on this transformation, which will be further boosted by an incoming Biden administration with a clearly defined energy mandate which similarly focuses on clean and renewable energy.
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