Editor’s note: This article was first published on ESG Clarity Asia.
Singapore-based multi-family office and licensed fund manager Maitri Asset Management is seeing huge opportunities in climate change investments, according to Ankit Khandelwal, the firm’s chief investment officer (pictured above).
“We expect at least a trillion-dollar of investments in clean energy across the world every year, and this presents itself with tremendous opportunities,” Khandelwal said in a virtual media briefing.
Spending towards clean energy are largely driven by governments globally, he explained. China and Europe, for example, have set goals to be carbon neutral by 2060 and 2050, respectively.
Biden’s $2trn “clean energy revolution” in the US is also expected to drive clean energy investments, added Edris Boey, Maitri’s ESG practice lead.
“This is a start to a carbon neutral plan in the US, with spending amounting to around $400-$500bn annually for the next four years,” Boey said.
“The moves made by both China and the US are significant because they contribute to almost half of global emissions annually. This will mean fundamental changes to energy production, energy storage, transportation and other infrastructure and buildings,” she added.
Within the clean energy space, Khandelwal believes there are investment opportunities in solar energy.
“The way we would like to play into this theme is through equipment manufacturers, infrastructure providers and material operators.”
He also likes bio-plastic and sustainable packaging, although acknowledged that they are currently “very niche”. “But we think there is a great future for those products,” he said.
OTHER THEMES
Besides climate change, Khandelwal is positive about four other investment themes, which are 5G, the ageing population, millennials & Gen Z, and cybersecurity.
Like other wealth and asset managers, Maitri believes that several companies will benefit from the 5G rollout.
“It open doors and opportunities to cloud computing, internet of things, artificial intelligence, remote medicine and autonomous driving.
“The way we would like to play into this theme is through equipment and infrastructure providers in this space. Testing equipment providers and device manufacturers will also benefit, as more devices will be needing them going forward,” he said.
On the ageing population front, Khandelwal said that the global population aged above 60 and 80 is expected to double and triple by 2050, respectively.
“This brings in itself an interesting opportunity set, because people are living longer and need a better lifestyle to maintain their longevity.
“So there are a lot of interesting opportunities in the healthcare space, be it in the pharmaceuticals, medical devices, health and wellness, as well as on financial and retirement planning space,”
Meanwhile, the Gen Z and millennial demographics, which are tech savvy, should provide opportunities in the internet space, including social media. They also pave opportunities toward sustainable investments, as most of them generally place importance on good nutrition and the environment.
Lastly, companies providing cybersecurity are expected to benefit from the accelerated digitalisation of everyday life, according to Khandelwal.
“In a growing digitalised world, cybersecurity will take more prominence. It is anticipated that annual cybersecurity spending will go above $250bn from 2025 onwards from the current $180bn per annum, so there is a tremendous growth opportunity in this sector.”
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