* Nat. gas has even more important role after Japan crisis
* Ecofin more positive on offshore wind turbine makers
* Nuclear power still has a strong future
By Nina Chestney and Adveith Nair
LONDON, April 11 With oil prices at two and a
half year highs, UK-based investment manager Ecofin expects to
benefit from investing in cheaper, more efficient natural gas
and in renewable energy over the next two years.
Crude oil prices have risen 75 percent since the second
quarter of 2010, but natural gas prices have been largely flat,
partly due to prolific U.S. shale gas production, a market many
expect to remain over-supplied for years.
"The disparity in price (between gas and oil) is not
sustainable and we will not only see gas displacing coal as a
source of power generation, but also oil in terms of
transportation," chief investment officer Bernard Lambilliotte
said, adding gas was six times as efficient as oil.
"We have a big belief in natural gas going forward. It has
an even more important role to play after the disaster in
Japan," he said.
Ecofin has around $1.9 billion of assets under management in
six funds covering the global utility, infrastructure,
alternative energy and energy sectors. It intends to launch four
new funds this year.
Although the firm invests in countries all over the world,
it increasingly favours the United States and China whose
regulatory environments are more predictable, competitive and
"Our investment trust has a total gross asset value of about
$900 million," said Lambilliotte. "We currently have an exposure
to pure natural gas assets of about 10 percent (through a shale
play in Texas) and different securities in various countries,
bringing it to a total of 20 percent."
He expects a similar size investment in renewable energy in
the long run.
U.S. crude, natgas prices: link.reuters.com/kyx88r
WIND DEVELOPERS BEST PLACED
When investing in renewables, Lambilliotte said it is
important to follow large firms "who are taking market share on
the manufacturing side," like General Electric (GE.N) and
The fund believes wind energy development is the most
investable renewables sector.
"In Europe, we are getting more positive on offshore wind,
and offshore wind turbine manufacturers, companies like Siemens,
REpower RPWGn.DE," said Ecofin's alternative energy analyst
On the solar side, the fund is positive on companies like
China's GCL (3800.HK) and Germany's Wacker Chemie (WCHG.DE).
"Pure-play wafer companies will potentially do well," said
Slee said. "The module suppliers are the most exposed to price
declines, which are possibly imminent."
The fund believes investments in battery material suppliers
for electric vehicles and light emitting diode makers could also
offer good returns.
The future of nuclear power is still strong, despite several
countries scaling back or postponing plans for new capacity
after the Japansese tsunami and nuclear crisis.
Manufacturing firms which would benefit from retrofitting
old U.S. nuclear plants would be a good investment opportunity.
"The current debate (over nuclear) is a political one,"
"We still believe in nuclear but we will not be investing in
it this year because it is out of fashion for the time being for
psychological reasons," he said, adding that nuclear's costs
were "palatable" and it is normally very safe.