Advice from Portfolio Manager Nick Henderson, Invest $1 Million in Bees
Where to Invest $1 Million Right Now
Five experts offer investment ideas to help fight climate change
The latest meeting of the rich and powerful in Davos included some 158 speakers for 38 different sessions to try to figure out “How to Save the Planet.” Even by World Economic Forum standards, it’s a lofty aim, but the annual winter gathering served to underline the growing importance of making investments in sustainability — the right investments.
To help with that, our panel in this issue of our regular series for those with $1 million to spend, looks a little deeper at some green homes for your greenbacks. Is the answer blowing in the wind or swimming in the sea, and what exactly is the nexus between AI, blockchain and garbage? Read on.
As usual, our team also provides a selection of more unusual places to drop your money, from the beauty of handmade Japanese dolls to wildfire-threatened wines, buzzing bees and waving meadows of seagrass.
Nick Henderson Recommends Invests in Bees!Portfolio Manager in the Responsible Global Equities team, BMO Global Asset Management
For a long time, we have not invested in solar despite the fact that it’s growing fast. We just don’t have enough confidence in the quality of companies to justify it. The low barriers to entry have, for the main, allowed further competition into the market, driving down pricing and, in turn, profitability.
That said, we are still benefiting from the rapid deployment of energy in renewable resources and one company we like is Orsted. This is an interesting one because it used to be Danish Oil and Natural Gas. Starting a decade ago, the company reoriented away from fossil fuels and embraced the development and maintenance of offshore wind farms. It already holds a quarter of the global market in offshore wind and provides power to about 9.5 million people. Its target is 30 million by 2025.
We are also taking a look at suppliers to wind farm operators, particularly those providing turbine blades. One name we are watching is Vestas Wind Systems, a Danish company that makes wind turbines. We haven’t invested yet because of the potential for increased competition, which in the past has undermined prices and reduced profitability. If there is a shakeout in the space we would likely have a more positive outlook.
What we really like to see in the wind sector is how much capacity a company has coming online. Orsted is currently producing 5.6 gigawatts of electricity but it has 15 gigawatts in development. While the company is already offshore in Europe, it’s made acquisitions in the U.S. that could be a springboard for growth in that market. Naturally, you’re going to get some pushback from local communities but they tend to have a lot more to say about onshore wind farms than offshore ones. So based on Orsted’s record and what they’re bringing to market we have confidence it should continue to win further bids and grow profitability. And there will be regulatory pressure globally for more energy from renewable sources so that provides a tailwind for Orsted.
Another way to play: In my time away from the office I’m a beekeeper. I manage two hives at my family’s home in west London with about 60,000 bees. I’m also a member of a local beekeeping association where we talk things through. Recently we’ve been working together to prepare for the Asian hornet, which has come across from France and can rapidly annihilate entire beehives. With colony collapse disorder and issues around pollination, I feel this is a way to support local ecology. Beekeeping also helps me think about issues around pesticides and farming practices that impact local biodiversity, and we engage with our portfolio companies on those issues. Every summer my bees do pay a dividend — a load of honey.