We invest in companies that can make a difference

Dossier : Vie des entreprisesMagazine N°786 Juin 2023
Par Stian UELAND

In this inter­view, Stian Ueland, port­fo­lio mana­ger of DNB Fund Rene­wable Ener­gy, tells us more about the fund and its specificities.

Can you tell us more about DNB Asset Management and more particularly about the DNB renewable energy ?

DNB Asset Mana­ge­ment is an asset mana­ger that is owned by DNB Bank, which is the lar­gest bank in Nor­way. It offers fixed income, equi­ty funds and savings pro­ducts to the bank’s clients and externally.
DNB Rene­wable Ener­gy is one of the pro­ducts offe­red by DNB Asset Mana­ge­ment. Its stra­te­gy was laun­ched in 1989. The Luxem­bourg Fund, which is focu­sed on rene­wable ener­gy and envi­ron­ment, was laun­ched in 2007.

It has been acti­ve­ly mana­ged for the past 15 years. We invest in the envi­ron­men­tal scene glo­bal­ly in lis­ted equi­ties : com­pa­nies that contri­bute to a bet­ter envi­ron­ment and also com­pa­nies that bene­fit from the envi­ron­men­tal tail­winds, that we believe are present.

The fund seeks to invest in equities contributing to a better environment. How do you define these equities and what are the main criteria you are taking into account ?

There is no clear and com­mon defi­ni­tion of what is a green busi­ness or an envi­ron­men­tal com­pa­ny. There are, indeed, dif­ferent ways to approach the sub­ject. As far as we are concer­ned, we are what we call a bot­tom up inves­tor, we make deep inves­ti­ga­tions to unders­tand their acti­vi­ty and how they impact the world through their acti­vi­ties. We deve­lop close rela­tions with the com­pa­nies and the mana­ge­ment. We also take into account ESG metrics such as car­bon inten­si­ty, their tran­si­tion plans and their goals towards net zero… This work and ana­ly­sis enable us to make up our own judg­ment about how these com­pa­nies contri­bute to a bet­ter envi­ron­ment and how they bene­fit from that trend or not.

In the spec­trum of funds inves­ting in the envi­ron­men­tal theme, we are on the clea­ner or gree­ner side. For ins­tance, we do not invest in com­pa­nies in the ear­ly steps of their tran­si­tion. We are also not inter­es­ted in ban­king, heal­th­care, or real estate… If one can find that these com­pa­nies are bet­ter posi­tio­ned than others for the ener­gy tran­si­tion, howe­ver, we feel that their impact remains fair­ly neu­tral on the environment.

What are your main investments ? Could you give us some examples ?

In the fund, you find a lot of wind and solar tech­no­lo­gies, uti­li­ties, deve­lo­pers of clean ener­gy, ener­gy effi­cien­cy com­pa­nies, elec­tri­fi­ca­tion… If we look at our par­ti­ci­pa­tions, we can men­tion Dar­ling Ingren­dients (5 % of the port­fo­lio) which ope­rates in the bio­fuels sec­tor. They col­lect pro­teins from the food value chain (bake­ries, slaugh­ter houses, res­tau­rants, gro­ce­ry stores, food esta­blish­ments…) and sepa­rate the fat from the pro­tein that they sell it to the bio­fuels indus­try. They also own and ope­rate a rene­wable die­sel busi­ness with the aim of repla­cing petro­leum die­sel. And they are cur­rent­ly buil­ding a sus­tai­nable avia­tion fuel busi­ness out of that rene­wable die­sel busi­ness. We can also men­tion Emphase, an Ame­ri­can lis­ted com­pa­ny, that main­ly offers inver­ters, bat­te­ries, as long as solu­tions and pro­ducts for resi­den­tial roof­top solar.

What are the main opportunities for French investors ?

In the fund, we do own French com­pa­nies and we have also owned others in the past. The two cur­rent hol­dings are Schnei­der Elec­tric, in the elec­tri­fi­ca­tion part of the port­fo­lio, and Air Liquide, in the hydro­gen part.

How the energy crisis and the war in Ukraine has impacted your investment strategy ?

The war has not chan­ged how we invest but it has chan­ged the busi­ness oppor­tu­ni­ties and risks for com­pa­nies we fol­low. We have wit­nes­sed a tail­wind for the theme. Indeed, rene­wable ener­gy and alter­na­tive ener­gy are now seen as a way to reach ener­gy secu­ri­ty and a cer­tain inde­pen­den­cy from com­mo­di­ty price cycles, while a few years ago, they were consi­de­red as a neces­si­ty for addres­sing climate.

What are the following steps ? What are your main challenges ?

We are loo­king for com­pa­nies with a busi­ness model, a mana­ge­ment and an acti­vi­ty that can make the dif­fe­rence. It is main­ly com­pa­nies that are able to carve out niches where they can gene­rate pro­fit, to eva­luate how mar­kets and busi­ness envi­ron­ments are chan­ging to conti­nual­ly impro­ving the portfolio.

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