Placeholder Thesis Portfolio Focus: Climate Control

Powered by Pynk, Placeholder’s ‘Thesis Portfolio’ gives investors exposure to a number of considered investment theses - such as the increasing importance of electric vehicles, renewable energy, efficient food supply, emerging markets, solutions to global warming, the move towards virtual working, eGaming and more.

Each Thesis is a carefully considered theme, painstakingly crafted by the Placeholder Investment Committee with a view to offering the best possible returns on your investment over a targeted 3-5 year period. In this week’s blog, we are looking at one of the individual ‘Theses’ within that portfolio - ‘Climate Control’.

Throughout the last couple of decades, the team managing the Thesis Portfolio has seen a variety of potential solutions to the sustainable energy problem. The rise and fall of Nuclear, Solar, Hydro and Wind have all displayed similar characteristics with massive capital inflow, positive Government regulation and excitement about pioneering technology. All follow this trajectory, but ultimately fall victim to similar downfalls: It takes too long to generate any significant return, the prevailing winds change, investors become distracted by the next shiny object…or a combination of all the above.

“What we are seeing, along with other early observers, is a paradigm shift in the space. Where in previous decades investors and lawmakers may have had the luxury of time, we as a civilization, no longer have that luxury. The evidence of Climate Change is incontrovertible, and as such a response is now required.”, says Philip Fletcher, Director, Head of Trading, Placeholder.

The Investment Committee have seen consistent innovation in tech completely dominate the markets in recent times, and believe it is now the time for energy to reclaim some of its former glory. Looking on the surface, you may think that these investments are much the same as before, carrying the same inevitability. However, they believe this to be untrue. The years spent on Research & Development across the various sustainable energy solutions has resulted in some tremendous improvements in some of the most costly aspects of these approaches. An important detail many other investors continue to overlook, and one the team behind the Thesis Portfolio believe to be pivotal in accurate valuation forecasts.

Over time, the Placeholder Investment Committee wishes to deploy across the major categories within sustainable energy, including: Nuclear, Wind, Hydro and Solar. However, they intend to go further, looking at the recycling sub-categories. They believe the sum of the innovation found across these areas currently provides significant upside and limited downside risk that match the requirements of the Thesis Portfolio.

“Our favourite category within the thesis is Nuclear. There are many routes to exposure to the growth of nuclear energy, and we believe the Thesis Portfolio follows a sustainable and well-considered approach designed to execute on the expected growth within this category in the coming decade. Companies like Cameco, Energy Fuels, Paladin Energy and Fission Uranium have enjoyed spectacular runs recently, and our exposure to this sector only shows our convictions about the growth prospects of this space over the coming year as more investment opportunity arises.” Philip Fletcher, Director, Head of Trading, Placeholder.

At the time of writing, the Uranium spot price trades at $30/lb, compared with the peak price in 2007 of around $90.00/lb. The team behind the Thesis Portfolio is extremely bullish on the spot price, and expect positions to benefit by several orders of magnitude from its anticipated appreciation in the coming years.

“Exposure to the other sustainable energy plays remains core for the Thesis Portfolio, and we have structured a number of approaches that will come into view when prices reach a level of value with a satisfactory risk:reward ratio, and the surrounding thematic confirmations we look for in each and every position we allocate towards”, says the Head of Trading.

As with all theses, the Placeholder Investment Committee will maintain their strategic and tactical management of this thesis for as long as their convictions around sustainable energy remain.


What do you like best about the Climate Control Thesis?

Is there anything you would change about the Climate Control Thesis?

Do you have any suggestions about assets that could be considered for the Climate Control thesis in the future?

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