Pictet To Launch New Climate Change Fund In 2009
Date: 06-Nov-08
Country: CHINA
Author: Leonora Walet
While climate change-related investments are not immune to the worldwide economic slowdown, Pictet believes climate-change funds are more resilient thanks to a lower correlation to the broader market.
The new fund, expected to be launched in the first quarter of next year, will be Pictet's fourth to focus on the climate change theme.
"We no longer talk about the implications of climate change. It's now a matter of how to address its implications," said Amy Cho, Pictet's managing director for business development in Asia Pacific.
The bank's Pictet Asset Management arm oversaw about 78 billion euros ($100.4 billion) as of the end of June.
"Products that affect our day-to-day living, like water or timber, we will likely see a supply-demand imbalance in the future," she said.
Pictet, one of the largest of Switzerland's non-listed private banks, launched its first climate change fund in 2000 to invest in firms focused on water-related sectors.
A US dollar-denominated version of the fund has returned 25.8 percent since inception, compared with a 29 percent decline in the MSCI World index over the same period, Cho said.
That fund's largest holding at the end of September was the French-based utility Suez Environment S.A., which operates largely in the water treatment and waste management sectors.
Water filter manufacturer Pentair Inc and ITT Corp, which offers services in wastewater treatment, were among its top 10 holdings.
Recently, Pictet introduced a timber fund aimed at exploiting an expected demand spike and supply squeeze in timber markets by investing in companies that own or manage forests and timberland.
Cho declined to say what the new fund would invest in, although she said its holdings would be related to demographics and climate change.
"Climate change is one of the most serious problems facing the world today, and as fund managers, we are trying to identify the investment opportunities behind issues of climate change," said Cho, who did not provide the target size of the new fund.
Pictet sees climate change-themed investments as promising propositions also because of positive long-term fundamentals supporting the sector.
While volatility in global markets has battered the performance of many funds, managers, including Pictet, see the current turmoil as an opportunity to add to long-term holdings.
"We're looking at accumulating stocks that are exceedingly at low valuations," said Cho.
For its climate change-themed funds, Pictet invests in companies which generate at least 20 percent of their sales from climate change-themed ventures.
(Editing by Tony Munroe)
