Over the year 2020, the fund was up +97.6% (class I EUR). Assets under management now exceed CHF 100 million. An excellent year for our energy transition fund EIC. The fund invests globally in technology companies offering solutions for a sustainable energy system.

This spectacular performance can be explained by several factors:

The days when subsidies dominated this sector are long gone. The competitiveness of solar and wind technologies, compared to traditional energies, is now given. Investors start to realise this. The risk in this sector is materially lower than in the past. Admittedly, there are still problems to be solved. Energy must be stored and made available when needed. But the means exist: lithium-ion storage technologies are often competitive. For long-term storage, hydrogen is a proven technological solution. The costs are still too high in this area, but they will decrease rapidly over the next few years. Possibly faster than many people think.

Decarbonisation is another long-term trend. Reducing carbon emissions to zero by 2050 is the overriding objective of major economies. The European Union, Canada and Japan are leading the way, with China joining them (by 2060). Following Joe Biden’s victory in the presidential election, the US will take the lead on the climate agenda. Decarbonisation is only possible through the electrification of the transport and heating markets. Renewable energies will have to penetrate these markets (often via hydrogen). Over time, renewables will become the oil of the future, putting an end to the carbon era. The energy transition has just begun and will increase over the next 30 years. Our proven investment strategy targets the heart of the energy transition. We avoid investment distractions at the thematic frontiers and focus on pure technology, small and mid-cap companies.

All of our main themes have contributed to the 2020 performance: electric transport, hydrogen, battery storage and solar energy have been the main contributors. We expect these themes to dominate in the long term. We strive to manage the fund in an active and disciplined manner. This sometimes also involves difficult sales decisions. We continue to find new investment themes by continuously researching our sector. This is a key positive approach for the fund’s investors. New technology themes are constantly emerging. These include carbon capture, solid-state batteries and floating offshore wind turbines. The opportunities are growing every day and we are not trapped by one or two themes.

The transformation of our energy system has only just begun. Even if the road is not always straight, we are convinced that this heavy trend will generate higher yields in the long-term.