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LOIM launches Future Electrification Strategy
Capturing opportunities as the energy system transitions to an electrified model
Lombard Odier Investment Managers (“LOIM”) today announces the launch of its Future Electrification strategy. The actively managed strategy aims to capture opportunities associated with new and shifting electrification revenue pools, as the global energy system transitions to an electrified, decentralised, clean and efficient model.
Multiple assets and products in our energy system are reaching or have already reached a tipping point, as innovation and policy have led to cost-efficient and functional solutions like electric vehicles, heat pumps or renewable energy. While we have seen other technology-led transitions in history, markets still seem not to price the upcoming “green alpha”1 opportunity. LOIM’s Future Electrification strategy seeks to harness the momentum behind widespread efforts of economy-wide electrification, capitalising on growing levels of policy support and increasing cost advantages to target strong returns for clients and meaningful progress in the net zero transition.
The Future Electrification strategy follows a high conviction stock selection process, to create a global equity portfolio of 40 to 50 holdings with a bias towards high quality companies with sustainable financial models, business practices and business models that support:
- Demand - including the clean electrification and enhanced efficiency of buildings, transport and industry and production processes alongside changing consumption patterns
- Supply - recognising that global energy supply needs to be completely decarbonised by switching from fossil fuels to renewable sources
- Enablers – including hardware, software and raw materials needed to further enable and accelerate the pace of the transition
Future Electrification is the latest addition to Lombard Odier’s CLIC® franchise, supporting progress towards net zero while fostering regenerative and nature-positive economic foundations, focused on a circular, lean, inclusive and clean economy.
The strategy is managed by Paul Udall, Lead Portfolio Manager, who brings over two decades of experience managing high-conviction sustainability strategies. Paul is supported by Peter Burke-Smith, Junior Portfolio Manager, together with LOIM’s sustainability research and investment teams who provide robust, science-based forecasting and analysis.
Paul Udall, Lead PM of Future Electrification commented: “Electrification is now more than an emerging trend in the climate change race; the growing prominence of the electric vehicle, solar power and heat pump sectors in hidden applications like industrials illustrate how it has taken hold across global industries. 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.”
Didier Rabattu, Global Head of Equities, Lombard Odier, continued: “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. At Lombard Odier, sustainability is a core investment conviction and this strategy seeks to capture market opportunities, accelerating the current shift towards electrified global energy systems, while targeting robust sustainability-linked returns for our clients.”
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 would 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 of 31 December 2022).
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This document is issued by Lombard Odier Asset Management (Europe) Limited, authorised and regulated by the Financial Conduct Authority (the “FCA”), and entered on the FCA register with registration number 515393. 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.
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.
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