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SUSTA INABLE INVESTMENT BOOTCAMP
Blue & Green Tomorrow
Fo r i n v e s tment p r o f e ss i o n a l s o n l y
April 2014
claudia Quiroz
E n e r g y E ffi c i e n c y
U n p r e c e d e n t e d c o n v e r g e n c e o f t h r e e mac r o d r i v e r s
Climate changePopulat ion
Increase of c15% by 2030
E n e r g y
Increase of c50% by 2030
Wat e r
Increase of c30% by 2030
f OOd
increase of c50% by 2030
Population g rowth
Resource Scarcity
SUSTAINABLE INVESTING
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Mac r o t r e n d s
E n e r gy
F ood Hea lth Re s o u r c es
Wat e r
S e c u r i t y o f supply & indust r i a l i s at ion
Re s o u r c e s c a r c i t yScarcity driven security of supply energy lost between
production and consumption is 80%
Climate c h a n g e rising
temperatures r ising sea levels
Changing rainfall distribution
Populat ion s h i f t sGrowing faster than ever before developing world
accounting for most of the growth
FROM MACRO TO INVESTMENT THEMES
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Investment objectives• Capital appreciation and
income• Smooth volatile of returns
over economic cycleR i s k
• Medium tolerance to risk• Equity exposure range 50-
75%Investment style• Global multi-asset
• Mid and large cap bias• Multi-thematic with focus
on sustainability
Investment process• Top down approach
• Bottom up approach driven by quants, fundamental research and stock selection
Climate change
R esource scarcity
Population
G rowth
I nd i c at i ve p o rt f ol io b r e a k d o w n
Fi xe d i n t e re s t
soverign debtInvestment g rade c orporate bondsEquit ies
Active management
global companiesSector/theme diversificationA lt e r n at i ve i nve s tments
Infrastructure private
equityGold/c ommodity
e t f
C a sh
Liquidi ty in ALL ASSET c l a sses
CLIMATE ASSETS FUNDPORTFOLIO BREAKDOWN
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M a r ke t d r i v e r s• Global energy crisis• Energy security driven by location of
fossil fuel reserves• 50% of the supply of fossil fuel
depleted• Energy demand to increase 30% by
2035• Demand of energy to account for 7-
9% of g d p• C o2 emission to increase 20% by
2035Re g u l at ion• EU targeting a 20% carbon
emission reduction by 2020• China wind power generation
target of 100gw by 2020• Support for new technologies
• Clean coal• Carbon capture and storage
E n e r g y e ffi c i e n c y• An evolution rather than a revolution• F astest and cheapest way to
reduce consumption and emissions
• 2/3 of the economic potential to improve energy efficiencies remains untapped
• C ost savings is the key driver of adoption• Every $ spent on energy
efficiency equal$2-4 in lifetime cost savings
• Average payback of 3-7 years
Inves tment o p p o rtuni t ies• Hydro power
• W ind power
• Geothermal
• Solar power
• W ind turbine manufacturers
• R enewable energy developers
• Clean/efficient engines
• Biomass
• Energy efficient lighting
• Electric vehicles c omponents
• Clean transport
• Power storage & c ontrol
• Building insulation
• Independent power producers
• Smart metering and electric grid
• Ra i l locomotive & equipment
• Signalling, control and safety electronics
ENERGY: INVESTMENT THESIS
POTEnTiAL c O2 EMiSSiOnS SAVin gS
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ViA E n E r g y E ffi c i E n c y
source: iea’s Clean energy progress r eport 2011
source: iea’s Clean energy progress r eport 2011
BUSinESS• Leading global supplier of highly
engineered systems and components
• Turbochargers, diesel engine, cooling systems and transmission technologies
• g reen secular trends by improving fuel economy and reducing emissions
inVESTMEnT c A SE
• Steady auto growth in the US and china
• Well positioned for European recovery- c50% of revenues
• diversified revenue mix – n A only 15-20% of total revenue
• new business pipeline of 10%-12% annual revenue growth by 2015
• Strong B /S - $2.5b available for deployment (potentially a 2% yield if P O r of 30%)k E y r i S k S
f Ac TO r S• r a w material costs• Slowing European markets• currency – 2/3 revenues outside the
US• increasing competition in
turbocharges by Bosch and Mercedes
BORGWARNEREFFICIENT ENGINES AND TRANSMISSION TECHNOLOGIES
r eferences to specific securities are not recommendations to buy or sell those securities.
a s at 31 march 2014
POTEnTiAL c O2 EMiSSiOnS SAVin gS ViA E n E r g y E ffi c i E n c y
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market Cap $14.5b
share price $62.9
p/e ratio 16.4x
Dividend yield 0.6%
CLIMATE ASSETS FUND PERFORMANCEsince launch to 31 March 2 0 14
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** launch Date 1 mar 2010 source: Financial express. a a ccumulation share class performance, inclusive of charges, in GBp with net income reinvested. The performance of other share classes may differ. source: Financial express 31/0 3/2014Past performance is not a guide to future performance and future returns are not guaranteed.
Cumulative performance (%) to 31 march 2014 1m 6m 1y 3y since launch
Climate Assets Fund - A Accumulation -0.43 4.33 7.24 21.67 39.90
IMA Mixed Investment 40-85% Sector Average
-0.67 3.73 5.63 19.10 32.47
WHAT WE DO
• Sustainable investing strategy
- Dedicated team- Climate assets fund- Segregated private
client portfolios
D F M (Discretionary
Fund Management)
Specialist Fu n d (Climate Assets)
• Assets under management in excess of £14.5 billion as at 01/0 9/2013• F ocus on working with private clients and their advisers• Personalised service to provide exceptional performance across all
investment strategies
Susta inab le i nve s tment
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YOUR INVESTMENT TEAM
CLA UDIA QUIROZinvestment directort: 0 20 7150 4749e: [email protected]
Claudia joined Quilter Cheviot from Henderson Global investors in 2009. s he is the le ad F und manager of the Quilter Cheviot Climate a ssets Fund, winner of the “Best new entrant” at the Climate Change a wards 20 10 and the “B est performing F und” at B archester Green’s e thical investment a wards 20 12. Claudia has over 13 years’ experience in s ustainable & r e sponsible investing and 5 years’ experience in engineering. s he graduated with a degree in Chemical engineering in a rgentina, and holds an mB a from Cass B usiness s chool in lo ndon. Claudia sits on the Quilter Cheviot international investment Committee.
CAMILLA C A R S O N investment Managert: 0 20 7150 4720e: [email protected]
Camilla joined Quilter Cheviot’s investment team in 2008. she holds an honours degree in politics from the University of l iverpool and is a qualified member of the Chartered securities institute. Camilla manages portfolios for private clients, trusts and charities and assists in the management of the Quilter Cheviot Climate a s sets Fund and the l ibero Balanced Fund. Camilla is also a member of Quilter Cheviot a l ternative investment Committee. in 2011 Camilla was named as one of CityWealth magazine’s ‘Top emerging Wealth managers.’ s he jointly established Quilter Cheviot’s Gen y a ssociation in 20 0 8 and is committed to a number of charitable projects.
WILLIAM B U C K H U R S T Investment directort: 0 20 7150 4160e: [email protected]
W illiam joined the company in 2006, having previously worked at UBs Wealth management and l aing & Cruickshank. He manages discretionary portfolios for private clients, trusts, and charities, and is the co-manager of the l ibero Balanced Fund and the Climate a s sets Fund. He also has responsibility for investment fund research at Quilter Cheviot. He is a member of the Chartered institute for s ecurities & investment and a graduate of newcastle University.
n ichOL A BATE Team Assistantt: 0 20 7150 4644e: [email protected]
nichola has a diploma in business administration and secretarial science from medicine Hat College, alberta. prior to Quilter Cheviot nichola was the personal assistant to the Bishop of Derby – a role she has also held in a military brigade headquarters, for exhibition organisers and at a primary school. s he is heavily involved with a number of military charities in conjunction with her family’s affi liation with the r oyal Hospital Chelsea. n ichola enjoys walking her miniature schnauzer, J ambo, and in any spare time enjoys sewing replica 18th and 19th century samplers.
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• The New Economy• m o r e with l e s s within a carbon constrained
environment
• Energy efficiency• our favourite investment theme• energy efficiency makes economic sense
• Quilter Cheviot’s version of sustainable investment• investing in the new economy• 5 investment themes with compelling growth end-
markets
• We do not invest in blue-sky companies• We invest in sound business models• We invest in companies with strong financial
positions
• Our Sustainable Investment Strategy – Climate Assets Fund
• Top down and bottom up approach• multi-strategy with dividend yield• mid and large market cap• performance track record
IN CONCLUSION
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THANK YOU
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This presentation has been prepared only for the recipient and date shown on the front page. it is not intended for any other persons and should not be relied upon by other persons.
This presentation has been prepared for information purposes only and is not a solicitation or an offer to buy or sell any security. it does not purport to be a complete description of our investment policy, markets or any securities referred to in the material. The information on which the presentation is based is deemed to be reliable, but we have not independently verified such information and we do not guarantee its accuracy or completeness. a l l expressions of opinion are subject to change without notice. The figures quoted do not include charges.
investors should remember that the value of investments, and the income from them, can go down as well as up and that past performance is no guarantee of future return. you may not recover what you invest. Changes in exchange rates may have an adverse effect on the value, price or income of foreign currency denominated securities. l evels and bases of taxation can change. investments or investment services referred to may not be suitable for all recipients. There are risks involved with this type of investment. please refer to the prospectus, Key investor information and supplementary information documents for further details.
apri l 2014
Quilter Cheviot l imited is registered in england with number 0 1923571, registered office at s t Helen’s, 1 Undershaft, l ondon eC3a 8BB. Quilter Cheviot l imited is a member of the l ondon s tock exchange and authorised and regulated by the UK Financial Conduct a uthority.
DISCLAIMER
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quiltercheviot.com
CONTACT US
QUiLT E r
chEViO T One
kingswayLondon W c2B 6An
c On TAcTclaudia Quirozt: +44 (0 )20 7150 4749e: [email protected]
OT h E r QUiLT E r chEViO T O ffi c E S :Belfast
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investors should remember that the value of investments, and the income from them, can go down as well as up and that past performance is no guarantee of
future returns. you may not recover what you invest. This document is not intended to constitute financial advice; if you are in any doubt as to its contents you
should seek independent financial advice.
Quilter Cheviot l imited is registered in england with number 0 1923571, registered office at one Kingsway, l ondon WC2B 6 a n . Quilter Cheviot is a member of the
l ondon s tock exchange and authorised and regulated by the UK Financial Conduct a uthority.
