Sun, Jan 17, 2016

Business, Banking & Finance
Green funds target ‘tomorrow’s champs’

Wermuth Asset Management (WAM) will be putting the spotlight on sustainable investment opportunities at a major energy summit which opens tomorrow in Abu Dhabi, UAE.

The German firm is participating in a panel at the 2016 World Future Energy Summit (WFES) in Abu Dhabi, where its founding Partner and CEO Jochen Wermuth will discuss “The next phase of renewable energy: an insight into ‘hot’ markets’. 

“The world has changed dramatically in the last 15 months,” says Wermuth. “Renewable energy prices have fallen below grid-parity and oil prices have fallen as a result. Moreover, the COP 21 (Conference of Parties) has set stringent targets for the world economy to reduce emissions that cause global warming. Whether it’s the decreased competitive advantage of fossil fuels or international policy measures that challenge standard operations in favour of environmental sustainability within corporations, the days of fossil fuels monopolising the economic landscape are over.” 

Wermuth Asset Management offers sovereign wealth funds, pension funds and high net worth individuals (HNWIs) the opportunity to invest across all asset classes. The company’s core investment strategy, implemented by its Green Gateway Funds, is to concentrate on organisations that are likely to become global leaders in a world of ever greater resource efficiency and ever more competitive renewable power. 

The firm focuses on listed, real and infrastructure assets that will see a significant value uplift by introducing the new, proven products and services of the funds’ portfolio companies.    

“With the international agreement to cap global warming at 1.5 deg C, world players will have to adopt energy efficient practices in order to remain competitive. Gulf states are no exception. The opportunity for Gulf states is to use reserves to invest in the champions of tomorrow. This will help them to weather the economic fall-out from falling fossil fuel prices. In my view, this region has the chance to be a front-runner in achieving carbon neutrality on a net basis, and to become a leader in a sustainable future,” Wermuth continues.  

Evidence of a shift in the energy landscape can be seen throughout the region. In the Middle East, Dubai set a new global benchmark in December 2014: at 5.84 US cents per kWh, the bid for Dubai Electricity and Water Authority’s 200-MW solar PV plant was cheaper than oil at $10/barrel and gas at $5/MMBtu. 

WFES, which features many regional players focusing their efforts on renewables, also demonstrates the emirate’s and the region’s clear direction towards sustainability. Further afield in Europe, renewable power has broken grid parity and has become competitive without subsidies. 

Wermuth Asset Management recorded its most successful year to date in 2015, having invested in environmental sustainability since 1999.  

The recently launched Green Gateway Fund 2 is aimed at the Middle East’s institutional investors, HNWIs, and family offices. The fund’s target size is €250 million ($272 million). It invests in companies that demonstrate high growth potential on the basis of proven business models in the renewable energy and resource efficiency space. 

The average holding period is likely to be in the range of four to five years. Portfolio companies will be actively supported by Wermuth Asset Management, with its many years of international experience, as they expand into global growth markets including the Middle East. 

The Green Gateway Fund 2 aims to provide investors net returns in excess of 20 per cent per annum, the firm says.

The World Future Energy Summit is taking place at Abu Dhabi’s National Exhibition Centre from tomorrow until January 21. 

Wermuth Asset Management is a German family office and BaFin regulated investment adviser on alternative and sustainable impact investments. WAM’s headquarters are in Berlin with investment team members in Amsterdam, Dubai, Moscow, Rio de Janeiro and Singapore.

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