Thu, Mar 28, 2024
A A A
Welcome Guest
Free Trial RSS pod
Get FREE trial access to our award winning publications
Industry Updates

BNP Paribas Energy Transition fund up 132% YTD

Monday, December 21, 2020
Opalesque Industry Update - The BNP Paribas Energy Transition fund has returned more than 132% since the start of this year and the fund size has grown to more than EUR 1.5bn, doubling in the past five weeks. The fund is managed by Edward Lees and Ulrik Fugmann, managers of the long/short equity Environmental Absolute Return Thematic fund ('EARTH'), which has also enjoyed strong returns since launch in mid-July. Edward and Ulrik are positive on the outlook for 2021 as companies developing energy transition solutions benefit from structural trends, technological developments and a favourable regulatory environment.

After a strong year for the BNP Paribas Energy Transition fund, the co-managers are optimistic that the competitiveness and profitability of companies developing energy transition solutions should continue to increase. Companies in this area are benefiting from supportive structural trends such as technological advances, regulatory developments and the growth of renewables as part of the energy mix.

Amid growing investor awareness of environmental issues, the fund has seen increased demand from clients keen to take advantage of the opportunities presented by companies participating in the energy transition. This demand is also being seen across BNPP AM's wider range of actively-managed thematic funds.

Fugmann and Lees were appointed co-managers of the fund in September 2019, and since the start of 2020 the fund has returned 132%, more than 127% ahead of its reference index. In mid-November the fund size exceeded EUR 1 billion for the first time, subsequently adding a further EUR 500 million in little more than two weeks.

The fund invests in the energy transition opportunity arising from increased energy demand, a changing energy mix and the need for energy efficient solutions to address climate change. It consists of a concentrated equity portfolio of 40-60 European, Asian and US companies that are driving change across three core themes of decarbonisation, digitalisation and decentralisation.

Portfolio companies are typically those developing solutions within renewable & transitional energy production, to replace coal, oil or gas; those offering technology designed to improve energy efficiency or reduce waste (for example low CO2 processes for energy-intensive industries such as cement or steel production); or those expanding energy infrastructure, such as transportation networks or storage facilities. Given the importance for energy efficiency of developments within big data, artificial intelligence and robotics, many companies are also benefiting from technological advances in these areas.

Fugmann and Lees have worked together for 20 years, during which time they have managed a range of energy and environmental strategies, joining BNPP AM in mid-2019. They also manage the BNP Paribas Environmental Absolute Return Thematic Fund ('EARTH'), a global long/short equity fund launched in July 2020 that invests in companies that are addressing environmental challenges in energy, materials, agriculture and industrial markets.

Edward Lees, co-manager of BNP Paribas Energy Transition, comments:

"We expect the strong growth opportunities that we have seen recently to remain for the foreseeable future as companies that offer environmental solutions to accelerate the energy transition are encouraged by the pace of regulatory change and the increasing profitability of renewables. Areas offering such opportunities include green hydrogen and fuel cells, both of which have been recent beneficiaries of environmental policies by the European Union and China."

Ulrik Fugmann, co-manager of BNP Paribas Energy Transition, comments:

"Technological advancements, the ability of companies to thrive without the need for subsidies and the net zero commitments made by many global governments to meet the objectives of the Paris Agreement are providing a positive backdrop for investors such as ourselves whose focus is on selectivity and active management. Conversely, the opportunity cost to those who ignore the change that is taking place could prove to be very significant."


Press release
Bg

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
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