30 June 2021
NEWS & OPINION
PROFILE
Deirdre Cooper Co-Head: Thematic Equity & co-Portfolio Manager, Ninety One Global Environment Fund
What, in your opinion, are the main drivers currently supporting the global transition to decarbonisation? The first big driver is government policy. With China, Japan and South Korea joining the net-zero club in 2020 – and Joe Biden winning the US election – national commitments to decarbonisation took a leap forward last year. The second driver is technological progress. With green-tech improving rapidly, wind is now the cheapest way to generate electricity in many parts of the world; electric vehicles are becoming more affordable and better-performing; and many energyefficiency solutions are paying back their costs at a faster rate. The third driver is that consumer preferences continue to shift towards ‘green’ solutions, which is why so many companies are ramping up their climate strategies and decarbonisation-related product ranges. Which sectors are likely to grow, and where do you see the best investment opportunities? One of the advantages of decarbonisation as an investment theme is that it encompasses companies of different sizes across industries and regions. As well as the obvious businesses like renewables-focused utilities, global decarbonisation requires, for example, technology companies that are making factories more efficient; chemicals companies that are reducing the carbon footprint of industrial processes; software and semiconductor companies that are enabling the electrification of transport; logistics companies that are reducing the emissions from transporting goods worldwide; and so on across sectors. So there are multiple ways for investors to play this theme.
The key thing is to select from within this broad ‘decarbonisation universe’ the companies that have the best growth potential and competitive advantages, and that represent good value. And as with any area of investing, it’s important to have a diversified portfolio. What is the approach of your strategy and why should it be appealing for an investor? When seeking to capture the structural growth driven by decarbonisation, we think it’s crucial to be highly selective. Our portfolio is concentrated because decarbonisation is a very disruptive process, and only the strongest companies with the best technologies will emerge as winners. We focus on companies that are leaders in their fields and that have competitive advantages. Secondly, we put great emphasis on valuation discipline. In many areas, the market is yet to appreciate the growth opportunity that decarbonisation is creating for select companies. Other areas – such as parts of the hydrogen economy – look expensive to us at present. We do a great deal of valuation analysis to try never to over-pay for a stock. Finally, we think it’s important to assess the sustainability of companies in a broad sense. We spend a lot of time analysing environmental, social and governance factors, and meeting with management teams, to become comfortable that the companies we invest in are treating all of their stakeholders appropriately. The 26th UN Climate Change Conference of the Parties (COP26) will take place in November. What do you expect from it? A key aim of COP26 is not only to get more countries to commit to decarbonisation, but to ensure that these commitments are backed by credible plans. If that happens, the pathway to a low-carbon economy will be much clearer, which will likely accelerate growth for businesses positively exposed to decarbonisation. That’s exciting for an investment strategy like ours. I’d also like to see more recognition of the essential role that emerging nations must play in achieving global decarbonisation. There needs to be much more investment in the developing world to help them decarbonise, and much more discussion on how to ensure that the energy transition is inclusive and that we support the world’s least advantaged communities.
EARN YOUR CPD POINTS The FPI recognises the quality of the content of MoneyMarketing’s June 2021 issue and would like to reward its professional members with 1 verifiable CPD points/hours for reading the publication and gaining knowledge on relevant topics. For more information, visit our website at www.moneymarketing.co.za 4 www.moneymarketing.co.za
VERY BRIEFLY Stonehage Fleming has announced the appointment of Mario Schoeman as Director of Business Development in South Africa. He will be responsible for leading the distribution of Stonehage Fleming’s global service offerings, including the firm’s Mario Schoeman flagship Global Best Ideas Equity fund, into the South African investment market, the company says in a statement. Schoeman has more than two decades of local and international investment industry experience, ranging from fund research and investment product management to retail and institutional business development. He was Head of Retail Distribution at Foord Asset Management for the past 10 years and served on various committees at the Association for Savings & Investment South Africa. Prior to this, he was with OMIGSA and STANLIB in executive positions. He holds a BSc degree from the University of Stellenbosch, as well as a Masters degree in Business Leadership from the University of South Africa. The Fiduciary Institute of Southern Africa (FISA) has a new national chairperson and national vicechairperson, as well as regional councillors. Following FISA’s AGM, Ian Brink was elected as chairperson for the next two years. He replaces Eben Nel, who Ian Brink came to the end of his term as chairperson after having filled the position for three years. Penny du Plessis was elected new vice-chairperson in the place of Angélique Visser, who also came to the end of her term after having served three years. The 10-person FISA Council now comprises Ian Brink, Penny du Plessis, Louis van Vuren (FISA CEO), Angelique Visser, Aaron Roup, Carmen Venter, Donice Perkins, Eben Nel, Rynoe Smith, and Ryno Venter. Maria Grace has been appointed Global Head of Property at Allianz Global Corporate & Specialty (AGCS), reporting directly to Chief Underwriting Officer Corporate Tony Buckle. Grace succeeds Thierry Portevin, who has led AGCS’s global risk consulting team since March 2021. Grace joins AGCS from Everest Re Group, where she served as the Chief Underwriting Officer for Property and Inland Marine at the Group’s Insurance Company. Prior to Everest Re, she held numerous executive and managerial roles at Starr Companies, AIG North America and AIG’s Latin American and Caribbean division. Grace has over 23 years of commercial underwriting and claims experience, she holds a Bachelor of Laws degree from the Pontificia Universidad Javeriana in Colombia, and a Juris Master’s Degree from George Mason University School of Law in the United States. Currently based in the United States, she will relocate to AGCS’s headquarters in Munich in the coming months.
