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LOIM launches Global Carbon Opportunity Strategy
Investing in the global carbon markets
Lombard Odier Investment Managers (“LOIM”) today announces the launch of its Global Carbon Opportunity strategy. The actively managed strategy is designed to capture opportunities across carbon markets worldwide. Global Carbon Opportunity is the latest addition to LOIM’s Alternatives franchise aligning with the CLIC® framework.
The strategy is managed by an accomplished team with more than 30 years of combined experience across the global carbon markets. Callum Lee joined LOIM in August 2022 as Portfolio Manager of the strategy and brings deep and unique expertise investing across compliance and voluntary carbon markets. Based in London, Callum was previously Head PM of Global Carbon at Altana Wealth where he was also Head of Quant Trading.
Callum will work closely with Lorenzo Bernasconi, Head of Climate and Environmental Solutions, and Ruben Lubowski, Chief Carbon and Environmental Markets Strategist. The team will be supported by LOIM’s Sustainability Research teams and have access to an independent global Expert Advisory Group.
The strategy combines a long-biased approach with absolute return trades and active tail risk management to generate attractive risk-adjusted returns with a low correlation to traditional and alternative asset classes.
Key features of the strategy:
- Upside participation in attractive risk/return opportunities globally including hard to access new and emerging carbon markets
- Quality alpha generation using a broad set of instruments to capitalize on market inefficiencies
- Actively managed tail risk seeking to protect against price shocks
- Promotion of the net zero and nature positive transition
Global climate commitments have reached a tipping point. Since 2019, net zero commitments by countries have increased four-fold and the number of companies setting net zero targets has increased nine-fold. To stay on track to meet global net zero goals to restrict the global temperature rise to 1.5C, carbon dioxide emissions will need to decrease by almost 70% by 2030.
Carbon pricing and carbon markets are critical for achieving these global climate goals, and the price of carbon needs to increase substantially to meet emission reduction commitments.
Lorenzo Bernasconi, Head of Climate and Environmental Solutions at LOIM, said: “We believe that the carbon markets are one of the most exciting investment opportunities of the climate transition mega-trend. We are seeing growing and more ambitious climate commitments, covering over 90% of global GDP, and an increasing proportion of these are legally binding. Carbon markets are a mission critical policy tool for meeting government and corporate climate commitments and are trading at a deep discount to where they need to be.”
Jean-Pascal Porcherot, Co-Head of LOIM and Managing Partner at Lombard Odier, added: “At Lombard Odier, sustainability is a core investment conviction and we believe that carbon markets will play a central role in accelerating the global economic transition towards a more sustainable future. Our Global Carbon Opportunity strategy seeks to capture these market opportunities, with the objective to promote the net zero transition and generate compelling sustainability-linked alpha for investors.”
About Lombard Odier IM
At Lombard Odier Investment Managers, we are rethinkers with one goal in mind. To provide our clients with outstanding investment solutions that meet their needs for the long term and evolve to thrive in the challenging world in which we all live.
We are focused investment specialists, seeking out investment opportunities that lie on less trodden paths, where our diverse and talented team can add genuine, persistent, value to our clients. We constantly rethink what we know and do, innovating to create new strategies and develop new ways of investing.
We believe that the next economic revolution has already begun and that sustainability will be a major driver of returns for the foreseeable future and beyond. For those with the skills to adapt to this new reality, sustainability will create new sources of alpha, open up new investment opportunities and lead to enhanced return and reduced portfolio risk.
Our team of sustainability experts combine sophisticated data sources, academic rigour and technical innovation to create leading-edge, science-based tools that provide unique insights that are available to all our investment professionals.
These unique insights are reflected directly in our growing range of dedicated sustainable investment strategies that are aligned to this core belief - That our economic model must move from being Wasteful, Idle, Lopsided and Dirty to become Circular, Lean, Inclusive and Clean. We call this The CLIC® Economy.
With more than 180 investment professionals, we are a global business with a network of 13 offices across Europe, Asia and North America and have assets under management of 63 billion CHF (as at 30 July 2022).
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important information.
This document has been issued by Lombard Odier Funds (Europe) S.A. a Luxembourg based public limited company (SA), having its registered office at 291, route d’Arlon, 1150 Luxembourg, authorised and regulated by the CSSF as a Management Company within the meaning of EU Directive 2009/65/EC, as amended; and within the meaning of the EU Directive 2011/61/EU on Alternative Investment Fund Managers (AIFMD). The purpose of the Management Company is the creation, promotion, administration, management and the marketing of Luxembourg and foreign UCITS, alternative investment funds ("AIFs") and other regulated funds, collective investment vehicles or other investment vehicles, as well as the offering of portfolio management and investment advisory services.
Lombard Odier Investment Managers (“LOIM”) is a trade name.
This document is provided for information purposes only and does not constitute an offer or a recommendation to purchase or sell any security or service. It is not intended for distribution, publication, or use in any jurisdiction where such distribution, publication, or use would be unlawful. This material does not contain personalized recommendations or advice and is not intended to substitute any professional advice on investment in financial products. Before entering into any transaction, an investor should consider carefully the suitability of a transaction to his/her particular circumstances and, where necessary, obtain independent professional advice in respect of risks, as well as any legal, regulatory, credit, tax, and accounting consequences. This document is the property of LOIM and is addressed to its recipient exclusively for their personal use. It may not be reproduced (in whole or in part), transmitted, modified, or used for any other purpose without the prior written permission of LOIM. This material contains the opinions of LOIM, as at the date of issue.
Neither this document nor any copy thereof may be sent, taken into, or distributed in the United States of America, any of its territories or possessions or areas subject to its jurisdiction, or to or for the benefit of a United States Person. For this purpose, the term "United States Person" shall mean any citizen, national or resident of the United States of America, partnership organized or existing in any state, territory or possession of the United States of America, a corporation organized under the laws of the United States or of any state, territory or possession thereof, or any estate or trust that is subject to United States Federal income tax regardless of the source of its income.
Sources of the figures:
EPA (2020) Global Greenhouse Gas Emissions Data
FAO (2021) COP26: Agricultural expansion drives almost 90 percent of global deforestation
Semenchuk et al. (2022) Relative effects of land conversion and land-use intensity on terrestrial vertebrate diversity
UNEP (2021) UN calls on countries to meet commitments to restore one billion hectares of land
PBL Netherlands Environmental Assessment Agency (2022) The Global Potential for Land Restoration
LOIM analysis
Target performance/risk represents a portfolio construction goal. It does not represent past performance/risk and may not be representative of actual future performance/risk.
Although certain information has been obtained from public sources believed to be reliable, without independent verification, we cannot guarantee its accuracy or the completeness of all information available from public sources.
Views and opinions expressed are for informational purposes only and do not constitute a recommendation by LOIM to buy, sell or hold any security. Views and opinions are current as of the date of this presentation and may be subject to change. They should not be construed as investment advice.
No part of this material may be (i) copied, photocopied or duplicated in any form, by any means, or (ii) distributed to any person that is not an employee, officer, director, or authorised agent of the recipient, without Lombard Odier Funds (Europe) S.A prior consent.
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