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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