Vontobel Asset Management, a unit of Swiss bank Vontobel Holding AG (VONN), is putting money into smart power grids and efficient electric motors as its traditional solar and wind-energy investments are hurt by surplus supply.
“Alternative-energy sectors remain difficult given current overcapacity,” Pascal Dudle, head of global trend investing, said in an interview in London. “We are putting more emphasis on the energy-efficiency side, such as grid infrastructure markets and demand-side energy efficiency.”
Governments from Brazil to China are promoting smart grids, which allow generators and users to monitor power use and reduce costs by saving energy in transmission. That’s lured some investors away from solar and wind stocks, which slumped after equipment manufacturers increased capacity even as prices sank.
Vontobel’s Global Trend New Power Fund, which has invested about 180 million euros ($238 million) in alternative-energy and energy-efficiency stocks, has scaled back its holdings in wind, solar, biofuels and geothermal companies to less than a quarter of the fund from about half in 2007, Dudle said. Investments include Siemens AG (SIE), Prysmian SpA (PRY) and NextEra Energy Inc. (NEE)
Slowing global growth and a market oversupply led to a 47 percent decline in solar-module prices last year, driving manufacturers including Solyndra LLC out of business and spurring funds to rein in investments. European countries including Italy and the U.K. accelerated subsidy cuts in the industry to curb growth as the sovereign debt crisis took hold.
“We have to look at the financial situations these regions are in,” Dudle said Feb. 28. “Europe is in a difficult situation and we have to manage this transition.”
As Vontobel expands in the energy-efficiency industry, it’s investing in motors used in pumps, ventilation systems and electric vehicles, according to Dudle. Efficient motors have variable speeds, enabling users to reduce energy consumption, he said, declining to elaborate on specific investments.
Vontobel is also looking at equipment makers that supply Samsung Electronics Co. and LG Electronics Inc., which produce LED light bulbs.
“We hear about what LG and Samsung are doing but you’re not necessarily aware of the companies that are supplying them with the components, and that’s where we can get real value,” Sheridan Bowers, Vontobel Asset Management’s director of U.K. and Ireland business, said in the same interview.
Vontobel, majority-owned by a shareholder pool including the founding family, generates revenue from investment banking, asset management and private banking. The asset management unit’s Future Resources fund has about 140 million euros in industries such as materials, water and forestry. Its 20 million-euro Clean Technology fund focuses on waste management, energy efficiency, grids and transportation.
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