James Tsinidis

The case to invest in electric vehicle (EV) producers could be falling away as supply increases, highlighting that not all clean energy investments are created equal. Emerging opportunities are coming from companies improving energy efficiency and managing waste, according to James Tsinidis, portfolio manager, Munro Partners.

“In recent times, the investment case for investing in EV manufacturers has fallen. Even before the anti-Musk Tesla backlash occurred, a combination of oversupply, slowing demand, and aggressive competition from China was putting pressure on car makers such as Tesla, making investments less compelling in the short term,” he says.

In terms of clean energy production, renewable sources like solar and wind are well established, and with more producers, competition is increasing as are supply chain risks. Mr Tsinidis says that on the other hand, nuclear energy is seeing a resurgence as a reliable, carbon-free baseload power source.

“Beyond clean energy generation, a compelling investment opportunity lies in electrification enablers or those companies providing grid upgrades, energy storage, and infrastructure solutions that allow renewables and nuclear to integrate seamlessly and efficiently into the energy system.

“Energy efficiency has done more to reduce emissions in the US over the past decade than renewables, yet it remains one of the most overlooked areas of climate investment. Unlike energy production, efficiency solutions reduce demand altogether, cutting costs and emissions in the process.

“As a result, energy efficiency solutions represent one of the fastest-growing and most financially attractive areas of climate investment. At the same time, industrial energy efficiency is becoming a major investment theme. Technologies such as industrial process optimisation, heat pumps, and waste heat recovery are improving operational efficiency in manufacturing, logistics, and data centres,” he says.

In terms of other opportunities, Mr Tsinidis says reducing waste to increase sustainability is becoming a focus for investors.

“The transition to a sustainable economy is also about redefining how we use materials. The circular economy focuses on reducing waste, increasing recycling, and creating more sustainable production systems.

“Plastics, industrial waste, and water scarcity present some of the biggest environmental challenges today. Companies involved in waste management, advanced recycling, and water treatment solutions are seeing rising demand, particularly as corporate and government policies push for higher sustainability standards in packaging and industrial processes,” says Mr Tsinidis.

Beyond waste management, the rapid adoption of artificial intelligence (AI) is reshaping global energy consumption. According to Mr Tsinidis, AI workloads are significantly more power-intensive than traditional computing, and as businesses deploy AI at scale, data centre electricity demand is set to surge.

“Data centres already contribute over 2.5 per cent of global emissions, a figure set to rise as AI infrastructure expands. Rather than slowing decarbonisation efforts, AI could increase the urgency of the energy transition, forcing companies to scale clean energy investment and grid infrastructure faster than previously expected.

“Additionally, AI is playing a role in energy efficiency and grid optimisation. Machine learning models are being used to improve electricity demand forecasting, enhance battery storage performance, and increase the efficiency of industrial and building energy systems. While AI is accelerating the need for clean power, it is also emerging as a key enabler of smarter energy use,” he says.

According to Mr Tsinidis, the direction towards decarbonisation is clear, whether through energy infrastructure, efficiency technologies, or resource management solutions.

“Long-term investors, who position early, will be well placed for the next phase of growth as the world accelerates toward a low-carbon future,” he says.

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Zentih rates Global Long/Short Funds.

Global Long/Short Funds rated approved or above by Zenith Investment Partners returned an average of 36.6% compared to the MSCI World index return of 32.8% for 12 months to 30 June 2013, while volatility levels were similar.

James Tsinidis, Research Manager – Alternatives at Zenith said “It is actually somewhat of a surprise that our global long/short funds have beaten the market over the past 12 months given the strong rally. While most of the funds on the approved list are typically long biased, many of them will hold higher levels of cash and have some shorts on. This will generally hold back returns in an upswing.”

Tsinidis noted that part of the reason some of the funds exceeded the index was because they were using their greater mandate flexibility to execute their investment ideas to full affect. For example, some of the Funds have moved into parts of the market that were out of favour (i.e. down the market capitalisation spectrum, unloved sectors, etc.) and were able to do this comfortably knowing that they have higher cash levels or some shorts in place to offset these positions. Other managers have utilised their ability to increase gross leverage in the portfolios so as to maximise some of their high conviction trade ideas.

Tsinidis went on to say, “over the longer term the Approved Listed funds have tended to do well in their portfolio positioning. We have gone back and looked at how the individual fund net exposures have changed over time and they generally seem to be very capable when it comes to removing or taking on more market risk.”

Of the 27 funds rated in Zenith’s Global Long/Short Sector Review released this week, only three funds achieved Zenith’s top rating; and all three were Platinum Asset Management funds (Platinum International Fund, Platinum International Brands Fund and Platinum Asia Fund). In terms of ratings moves, the PM Capital Absolute Performance Fund was upgraded to Recommended after some positive changes at the firm over the last year.

Zenith’s complete Approved Product List for the Global Long/Short Sector is shown in full below:

Global Funds

• Platinum International Brands Fund – Highly Recommended
• Platinum International Fund – Highly Recommended
• PM Capital Absolute Performance Fund – Recommended
• K2 Select International Fund – Recommended
• Five Oceans Wholesale World Fund – Approved

Regional Funds – Asia

• Platinum Asia Fund – Highly Recommended
• K2 Asian Absolute Return Fund – Recommended
• Premium Asia Fund – Recommended
• Regional Funds – Other
• Platinum European Fund – Recommended
• Platinum Japan Fund – Recommended
• Premium China Fund – Recommended

Sector Funds

• Pengana Asia Special Events Fund – Recommended
• Pengana Global Resources Fund – Recommended
• Platinum International Health Care Fund – Recommended
• Platinum International Technology Fund – Recommended
• Premium Asia Property Fund – Recommended

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