Private credit might be less attractive than it was last year as investors rush into the market, but there are sweet spots to be found.
Pouliquen and his team will consider investing only in so-called clean technology companies that derive at least 50% of their revenues from environmentally friendly technological advances or are leaders in the particular area where they are advancing environmental sustainability. An example of a company that fits this requirement is Toyota Motor Corporation in Japan, which is a leading manufacturer of hybrid vehicles and has strong brand recognition in this area.
Examples of companies that have environmental sustainability agendas but wouldnÆt meet the criteria at this point are CLP Holdings in Hong Kong, Royal Philips Electronics of the Netherlands, and Sony Corporation in Japan.
CLP Holdings is advancing the use of renewable energy and is just 0.6% shy of meeting its target of generating 5% capacity from renewable energy by 2010, but thatÆs not significant enough to affect the companyÆs revenues. Philips is a brand leader in energy saving light bulbs and Sony has recently rolled out a more energy efficient flat screen television, but in both cases those initiatives make up a small portion of their total business.
Christian Goldsmith, a Hong Kong-based international product specialist at ABN Amro Asset Management, says investment opportunities are available in eight clean technology subsectors. These include solar energy, wind power, fuel cell, bio fuel, waste water and management, water distribution, transportation, and power conversion and supply.
Key players in solar energy, although not necessarily companies that ABN Amro Asset Management would invest in, include Sharp, Kyocera, Shell Solar, BP Solar and Q Cells. Key players in wind power include Vestas, Gamesa and Iberdrola. Key players in fuel cell include Ballard Power System, Fuel Cell Energy, Siemens and Toyota.
ôOur fund will have no geographic boundaries,ö Goldsmith says. ôWe want to capture every opportunity that we can find.ö
The fund will also have no capitalization constraints and will not be closely tracking a benchmark.
This latest fund is the second Clean Tech Fund to be launched by ABN Amro Asset Management, the first of which was launched in Paris earlier this year and was exclusively for that market. That fund now has around 40 million euros in assets. Veolia is among that fundÆs holdings.
Goldsmith says the demand for clean technology companies has been rising in recent years because more investors are realizing the environmental and financial gains from doing so. The demand is also being driven by the availability of more investment opportunities owing to increasing investments in clean technology by companies and governments worldwide, continuous innovation and development, and declining production costs and improving profit margins.
Within Asia, ABN Amro has seen strong interest for the Clean Tech Fund in Hong Kong and Singapore, Goldsmith says.
This is the latest environment-related initiative from ABN Amro. In March, the bank launched the worldÆs first Climate Change and Environmental Index, which tracks the performance of listed companies involved in addressing climate change and environmental issues. It has also launched structured products with underlying investments linked to companies that have exposure to potential growth opportunities related to climate change and the environment.
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While Asia still lags the global average, interest in sustainable projects is growing fast; the only thing needed now is the expertise to drive growth
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