B.C. firms make clean energy fund
Two Vancouver companies among
59 global equity investments
Bruce Constantineau
Thursday, September 13, 2007
Shares in two Vancouver-based
companies have been included among
59 global equity investments that make
up Canada’s first clean energy
investment fund.
Hydropower developer Plutonic Power
and natural gas/hydrogen combustion
engine developer Westport Innovations
comprise part of Criterion Global Clean
Energy Fund, which was launched
this week.
But one of B.C.’s highest-profile clean
energy firms - fuel-cell maker Ballard
Power Systems - failed to make the cut.
Philippe de Weck, senior investment
manager for Geneva-based fund adviser
Pictet Asset Management, said he
considered Ballard but chose not to
invest in the Burnaby-based firm.
“We’re here to provide returns to our
fundholders, and there’s not enough
evidence for me to put fundholders’
money in that stock,” he said in a
telephone interview from Geneva. “Fuel
cells are very conceptual, and there are
very little up-front revenues.”
Ballard lost $181.1 million US last year
and its stock has traded between $4.43 and
$8.99 in the past year, closing Wednesday
at $4.59.
But de Weck said he’s not opposed to
investing in all fuel-cell companies,
noting the fund holds shares of
Connecticut-based FuelCell Energy,
which develops electricity-generating
fuel-cell power plants.
“They have commercial contracts and
orders for fuel cells in place,” he said.
“They have brought the technology to
market in a way that can be profitable,
so we believe we can invest in them.”
While Ballard’s financials have been less
than stellar, Westport Innovations has
also lost money on a consistent basis,
and shares have traded between 87 cents
and $4.05 in the past five years, closing
Wednesday at $2.03.
De Weck said the fund recently bought a
small position in Westport because he felt
it was an “opportunistic” purchase.
“It has been a terrible stock over the years
- a very poor performer for shareholders,”
he said. “But we’re happy with our entry
point and believe in the long-term story
of using natural gas as an alternative
transportation fuel.”
The Canadian clean energy fund will be
managed almost identically to Pictet Asset
Management’s own clean energy fund,
which has attracted about $450 million
US from European investors since it was
launched four months ago.
De Weck said the Pictet fund has increased
by about seven per cent since the launch,
while global equities declined by about
two per cent during the same period.
“But it’s very early days, and you can’t
judge this over a period of just a few
months - you have to take a long-term
view and look at it over several years,”
he said.
The fund will consider investing in firms
that focus on carbon-free energy (like
solar, wind and hydroelectric), low-carbon
energy (including natural gas and
biofuels), and energy efficiency (such
as power monitoring and controls
and batteries).
It will also consider firms that contribute
to or benefit from the transition to less
carbon-intensive energy.
The fund’s largest investments - about
25 per cent - are in solar energy
companies, followed by energy-efficiency
firms, wind power, natural gas,
hydroelectric, and biofuels.
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“We see solar as having the greatest
potential right now because the cost of
solar is coming down more rapidly than
anything else,” de Weck said. “The prices
of wind turbines are actually going up.
We think the market just doesn’t
appreciate the long-term growth that solar
will experience.”
While natural gas isn’t a carbon-free fuel,
de Weck said investment in natural gas
companies makes sense because it’s an
excellent “transition” fuel in the move to
cleaner energy.
“The shift from oil to natural gas has a big
carbon saving, and as carbon taxes are
introduced on coal-fired power plants,
it will favour natural gas as an energy
source,” he said.
De Weck said within the scope of all his
firm’s products, the clean energy fund
represents a high-risk investment that has
to be made and judged over several years.
We think the market just doesn’t appreciate the
long-term growth that solar will experience.
Philippe de Weck, a Pictet Senior Fund Manager based in Geneva.
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