Global wealth and asset manager Lombard Odier Investment Managers (LOIM) announced the launch of “Future Electrification,” a new actively managed equity strategy aimed at capturing opportunities related to emerging and shifting electrification trends arising from the global energy transition.
According to a statement by LOIM announcing the new strategy, the launch comes as markets appear to have not yet priced in the upcoming “green alpha” opportunity, even as multiple energy system assets and products are reaching a tipping point, with innovation and policy driving clean energy solutions such as EVs, heat pumps and renewable energy.
LOIM described its approach to assess green alpha, in which companies are expected to financially outperform peers in an environmentally-aligned scenario, by assessing market tipping points driven by changing factors including regulation, cost-down curves or pricing in environmentalEnvironmental criteria consider how a company performs as a steward of nature. externalities, and identifying companies with a total addressable markets (TAM) materially greater than market consensus.
Didier Rabattu, Global Head of Equities, Lombard Odier, said:
“We believe that Electrification is set to be one of the biggest system changes in the history of capitalism, with exciting, forward-looking investment opportunities to be found.”
Using a high-conviction stock selection process, the new strategy aims to create a global equity portfolio of 40-50 stocks, with targeted themes including Demand, such as clean electrification, buildings, transport and industrial efficiency, production processes and changing consumption patterns; Supply, relating to the switch from fossil fuels to renewable sources, and; Enablers, including hardware, software and raw materials needed to enable and accelerate the energy transition.
The new strategy will be managed by Lead Portfolio Manager Paul Udall, and supported by Junior Portfolio Manager Peter Burke-Smith.
Udall said:
“With electrification expected to be the most immediate and impactful solution to climate and energy security crises, our dedicated Future Electrification Strategy will harness rising policy and industry-level support for the energy system’s transition to an electrified model, while capitalising on the profit pools emerging as a result.”
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