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Disclosure – Non-substantive Research
This is not substantive investment research or a research recommendation, as it does not constitute substantive research or analysis. With this commentary, Kepler Partners LLP does not intend to influence your investment firm's behaviour.
It took the whole of human history before 1800AD for the world's population to reach one billion people, and by the start of the 20th century that figure still remained below two billion. Since then, the world's population has increased fourfold. Fossil fuels have enabled this progress, but carry severely negative side-effects. The advent of renewable energy has perhaps broken that vicious loop. More energy does not now need to equate to dirtier air, dead seas and a thinner atmosphere.
Among the challenges of the transition to cleaner fuel, one of the greatest is that it requires huge upfront investment. But the tailwind among governments and populations is clearly there, and the listed companies sector has been quick to respond to the opportunities available in this space, where c.£4.4bn of equity is now invested.
For long term, income-focused investors it certainly seems an appealing proposition. But the risks and opportunities are very different to traditional equity investing. In this article we attempt to de-mystify and sketch out the main characteristics of the listed funds offering direct exposure to renewable energy infrastructure.
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