CLSA hedge fund bets on electric cars, China wind | Reuters

“People want electricity — coal as power generation needs to be addressed,” he said.

(Additional reporting by Kevin Lim; Editing by Rupert Winchester)

“Asia leads on battery development, solar panel production, and it’s soon to lead in installations with China,” he said. He said the areas investors were most interested in, because of the potential scale, were transportation and power generation.

He said Asian countries were in various states of moving toward such cleaner economies, with Japan leading the globe in making its manufacturing more energy-efficient after the 1970s oil shocks, China building more nuclear power capacity than anyone else, and India studying how to avoid polluting its ground water.

Chile’s SQM is the world’s top lithium producer and experts say a lithium boom may be coming. The fund has a large exposure to Japan, home to electric car leaders such as Toyota and Nissan as well as battery firms Panasonic and Hitachi. Automakers and battery firms are now seeking tie-ups.

“This trend is going to continue for the foreseeable future, because resources are constrained — the atmosphere has been used as a dump for free,” said Pidden on the sidelines of a UBS hedge fund conference.

China expects wind capacity to hit 100 gigawatts by 2020. “Asia will lead the world in the development of these products.”

Pidden said the firm was betting on existing technologies and did not like to take technology risks. Vestas is the world’s biggest maker of wind turbines, while Chinese industry suppliers include gearbox maker China High Speed Transmission and China Wind Systems.

CRA, part of Asia-focused brokerage CLSA, manages $100 million of assets spread over several funds, including a long-short fund that invests in clean tech equity and a more focused fund dedicated to clean water.

“The era of oil will be over by 2050 because we will have electrified the transportation system,” Pidden said confidently.

“We believe in 10 years there will be a lot of wind off China and South Korea,” he said. Bolivia holds 50 percent of the world’s lithium deposits, but extracting it may be a challenge.

A move to fully electric cars would completely change the auto supply chain, from different raw materials such as lithium for batteries to more consumer financing for the higher initial purchasing cost and less need for a spare parts industry.

SINGAPORE CRA Management, a clean-technology focused hedge fund manager, is betting on offshore wind, electric vehicles and cleaner coal, all technologies that it sees taking off on a massive scale in Asia.

“In 15 years there will be drop in demand for oil as a transportation fuel,” he said.

CRA has beaten indices such as the MSCI index of Asia-Pacific stocks traded outside Japan since its inception in August 2006, Pidden said without giving details, though many clean-tech funds dived last year.

By Neil Chatterjee

| SINGAPORE

Andrew Pidden, managing director of the Singapore-based firm, said the world will move toward a low energy and low carbon economy because of several large drivers — the rising cost of energy, the desire to clean up the planet and a push from consumers for green products.


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