Simon Webber Schroders Lead Portfolio Manager
Caproasia.com | The leading source of data, research, information & resource for financial professionals, investment managers, professional investors, family offices & advisors to institutions, billionaires, UHNWs & HNWs. Covering capital markets, investments and private wealth in Asia. How do you invest $3 million to $300 million? How do you manage $20 million to $3 billion of assets? Caproasia - Learn more



This site is for accredited investors, professional investors, investment managers and financial professionals only. You should have assets around $3 million to $300 million or managing $20 million to $3 billion.










Schroders Lead Portfolio Manager Simon Webber: Why the Going is About to Get Tougher for Investing in Climate Change

Investment commentary on Why the going is about to get tougher for investing in climate change by Simon Webber, Schroders Lead Portfolio Manager (July 2021):

Schroders is a global active asset manager managing more than £574.4 billion (€641.7 billion / $785.1 billion 31/12/20) assets and managed locally by 42 investment teams worldwide. As a global active asset manager, the way we direct capital not only shapes the financial returns we achieve for our clients but also the impact that the companies in which we invest on their behalf might have on society.



- Article continues below -



Sign Up
Basic Member: $5 Monthly | $60 Yearly
Newsletter Daily 2 pm (Promo): $20 Monthly | $180 Yearly (FP: $680)


The 2024 Investment Day
6th March Hong Kong | 13th March Singapore

Private Equity, Hedge Funds, Boutique Funds, Private Markets & more. Taking place on 6th March 2024 in Hong Kong, 13th March 2024 in Singapore.
Visit | Register here


The 2024 Family Office Summit
10th April Hong Kong | 24th April Singapore

Join 100+ single family offices & family office professionals in Hong Kong & Singapore
Links: 2024 Family Office Summit | Register here





 

Why the going is about to get tougher for investing in climate 

Simon Webber Schroders Lead Portfolio Manager

2020 was an extraordinary year for climate change action. Public opinion, governments, businesses and financial markets all had major shifts in their appreciation of the urgent need to address the climate crisis. More investment, research and development, and international collaboration will now come together to enable a faster transition to a net zero economy. 

While this is just a start, it is undeniably fantastic news for the planet and our chances of avoiding a climate disaster. So far, the new political and business momentum has also been exceptionally supportive for investors in businesses working to mitigate climate change. 

 

1. Valuations Heating Up 

However, investing is rarely that straightforward. As financial markets woke up in 2020 to the scale of the transition ahead, company valuations started to reflect this. 

There was a large upward re-rating in the valuations of companies with strong technology in areas such as renewable energy, electric vehicles (EVs), hydrogen, circular economy and sustainable foods. 

This re-rating mainly reflects the improved growth prospects for those industries and the companies that have invested to create solutions as the transition gathers pace. 

 

2. Competition is too 

Higher market valuations for climate change assets not only represent a headwind to future investment returns, but broader awareness of the transition and growth opportunity ahead will now inevitably lead to stronger competition. 

Solar 

There have already been several examples of competition driving down returns in climate-related industries, the best example of which is the solar industry. A wave of investment and capacity expansion over the last decade has commoditised and fragmented the industry. Overall, the solar industry has been a terrible long-term investment. 

Another recent example is cathode materials, which are essential components in lithium-ion batteries. The suppliers to this industry have dramatically scaled up their production, but there has also been a wave of new entrants building capacity. The industry structure has, therefore, fragmented and despite the strong growth the market has gone into oversupply with margins and returns on capital under pressure for all involved. 

Electric vehicles 

Established pure play manufacturers are now being joined by a raft of new entrants. Numerous other start-ups have raised capital and listed via special-purpose acquisition companies (SPACs). And there has been an explosion of new model introductions by incumbent carmakers. 

This competition will be good for volume growth, and some suppliers will do very well, but it will likely be a lot more challenging for the automakers competing for market share with the consumer. 

Renewable energy power generation assets 

Here, the market is fragmenting amid a large increase in the number of companies seeking to build and own renewable assets. The new competitors include newly established developers funded by capital markets, incumbent utilities making the shift to cleaner generation, and most recently several traditional oil and gas companies which are reallocating their capital budgets from fossil fuels to renewable power. 

In this environment of plentiful funding and an increase in competition, successful companies will be those that have a clear and sustainable competitive edge. The better industries to remain invested in will be those where there remains a reasonable number of rational competitors because there are high barriers to entry and the potential for product differentiation. 

 

3. The Wind of Change 

One example where the competitive environment remains reasonable, in our view, is the wind equipment industry. 

The wind turbine industry had a major shakeout over the last decade, and market share has consolidated naturally around the strongest companies. Furthermore, there have been no major new entrants in recent years, and the key players have different propositions, so the wind industry is one where we believe the prospects of achieving profitable growth at good returns look strong. 

 

Important Information 

This document is intended to be for information purposes only and it is not intended as promotional material in any respect nor is it to be construed as any solicitation and offering to buy or sell any investment products. The views and opinions contained herein are those of the author(s), and do not necessarily represent views expressed or reflected in other Schroders communications, strategies or funds. The material is not intended to provide, and should not be relied on for investment advice or recommendation. Any security(ies) mentioned above is for illustrative purpose only, not a recommendation to invest or divest. Opinions stated are valid as of the date of this document and are subject to change without notice. Information herein and information from third party are believed to be reliable, but Schroder Investment Management (Hong Kong) Limited does not warrant its completeness or accuracy. 

Investment involves risks. Past performance and any forecasts are not necessarily a guide to future or likely performance. You should remember that the value of investments can go down as well as up and is not guaranteed. You may not get back the full amount invested. Derivatives carry a high degree of risk. Exchange rate changes may cause the value of the overseas investments to rise or fall. If investment returns are not denominated in HKD/USD, US/HK dollar-based investors are exposed to exchange rate fluctuations. Please refer to the relevant offering document including the risk factors for further details. 

This material has not been reviewed by the SFC. Issued by Schroder Investment Management (Hong Kong) Limited. 

Schroder Investment Management (Hong Kong) Limited Level 33, Two Pacific Place, 88 Queensway, Hong Kong www.schroders.com.hk 

 


About Schroders

As a global active asset manager, the way we direct capital not only shapes the financial returns we achieve for our clients but also the impact that the companies in which we invest on their behalf might have on society. The relationship between these two outcomes has rapidly evolved as we see a fundamental shift in how companies are viewed and valued. Understanding the impact that they can have on society and the planet is crucial in assessing their ability to deliver risk-adjusted profits.

Our ongoing success is built on a history of experience and expertise, whereby we partner with our clients to construct innovative products and solutions across our five business areas consisting of Private Assets & Alternatives, Solutions, Mutual Funds, Institutional and Wealth Management and invest in a wide range of assets and geographies. By combining our commitment to active management and focus on sustainability, our strategic capabilities are designed to deliver positive outcomes for our clients.

We are responsible for £574.4 billion (€641.7 billion/$785.1 billion 31/12/20) assets of our clients, managed locally by 42 investment teams worldwide. As a global business with over 5,500 talented staff across 35 locations, we are able to stay close to our clients and understand their needs. We have over 200 years of experience in investment and innovation.

Visit: www.schroders.com.hk




Managing $20 million to $3 billion. Investing $3 million to $300 million.
For Investment Managers, Hedge Funds, Boutique Funds, Private Equity, Venture Capital, Professional Investors, Family Offices, Private Bankers & Advisors, sign up today. Subscribe to Caproasia and receive the latest news, data, insights & reports, events & programs daily at 2 pm.

Join Events & Find Services
Join Investments, Private Wealth, Family Office events in Hong Kong, Singapore, Asia-wide. Find hard-to-find $3 million to $300 million financial & investment services at The Financial Centre | TFC. Find financial, investment, private wealth, family office, real estate, luxury investments, citizenship, law firms & more.  List hard-to-find financial & private wealth services.

Have a product launch? Promote a product or service? List your service at The Financial Centre | TFC. Join interviews & editorial and be featured on Caproasia.com or join Investments, Private Wealth, Family Office events. Contact us at [email protected] or [email protected]

Caproasia.com | The leading source of data, research, information & resource for financial professionals, investment managers, professional investors, family offices & advisors to institutions, billionaires, UHNWs & HNWs. Covering capital markets, investments and private wealth in Asia. How do you invest $3 million to $300 million? How do you manage $20 million to $3 billion of assets?



Quick Links


2021 Data Release
2020 List of Private Banks in Hong Kong
2020 List of Private Banks in Singapore
2020 Top 10 Largest Family Office
2020 Top 10 Largest Multi-Family Offices
2020 Report: Hong Kong Private Banks & Asset Mgmt - $4.49 Trillion
2020 Report: Singapore Asset Mgmt - $3.48 Trillion AUM


For Investors | Professionals | Executives
Latest data, reports, insights, news, events & programs
Everyday at 2 pm
Direct to your inbox
Save 2 to 8 hours per week. Organised for success

Register Below

For CEOs, Heads, Senior Management, Market Heads, Desk Heads, Financial Professionals, Investment Managers, Asset Managers, Fund Managers, Hedge Funds, Boutique Funds, Analysts, Advisors, Wealth Managers, Private Bankers, Family Offices, Investment Bankers, Private Equity, Institutional Investors, Professional Investors

Get Ahead in 60 Seconds. Join 10,000 +
Save 2 to 8 hours weekly. Organised for Success.

Sign Up / Register


    InvestorProfessionalFamily OfficeExecutive


    SubscriptionMembershipEvents


    Professional InvestorPrivate WealthFamily OfficePrivate BankingWealth ManagementInvestmentsAlternativesPrivate MarketsCapital MarketsESG & SICEO & EntrepreneursTax, Legal & RisksHNW & UHNWs Insights










    Web links may be disabled on mobile for security.
    Please click on desktop.










    Caproasia Users

    • Manage $20 million to $3 billion of assets
    • Invest $3 million to $300 million
    • Advise institutions, billionaires, UHNWs & HNWs

    Caproasia Platforms | 11,000 Investors & Advisors

    Monthly Roundtable & Networking

    Family Office Programs

    The 2024 Investment Day

    • March 2024 - Hong Kong
    • March 2024 - Singapore
    • June 2024 - Hong Kong
    • June 2024 - Singapore
    • Sept 2024 - Hong Kong
    • Sept 2024 - Singapore
    • Visit: The Investment Day | Register: Click here

    Caproasia Summits

    Contact Us

    For Enquiries, Membership
    [email protected], [email protected]

    For Listing, Subscription
    [email protected], [email protected]

    For Press Release, send to:
    [email protected]

    For Events & Webinars
    [email protected]

    For Media Kit, Advertising, Sponsorships, Partnerships
    [email protected]

    For Research, Data, Surveys, Reports
    [email protected]

    For General Enquiries
    [email protected]





    Caproasia | Driving the future of Asia
    a financial information technology co.
    since 2014




    Previous article$207 Billion Asset Manager Robeco to Grow ESG in Asia, Grow Investment Team in Singapore
    Next articleSingapore: Need for Tax on Wealth, Inheritance, Estate & Property
    Caproasia.com covering capital markets, investments and private wealth in Asia. Our users manage, advise & invest $25 trillion assets in Asia