Skip to main content
Commentary Cleaner Energy

Market background still positive for energy efficiency

WHEB Headshots 27

I recently attended the UBS Global Clean Energy and Utilities Conference and met with some analysts in the clean tech field. It is clear that the market backdrop is still more favourable to energy efficiency, whereas the renewable energy sector continues to be challenging. In the current cost-conscious economies, companies want to stay competitive while reducing costs at the same time. Energy efficiency themes clearly play out well in this environment. For instance, one would expect the rise of gasoline prices in the US would hold back consumers from buying cars, but the demand for fuel-efficient cars actually spurred demand for automobiles in March. Another piece of anecdotal evidence is the recent growth of Kingspan, a leading supplier of energy saving solutions to the construction industry. The company reported an impressive 14% organic revenue growth in 2011 despite facing a challenging construction market.

By contrast, renewable energy is still facing various headwinds. In the solar sector, prices are collapsing throughout the whole value chain from polysilicon to solar modules. We recently met with the management of Centrotherm, a leading solar equipment manufacturer. With the lackluster demand for solar equipment, the company’s near-term strategy was to take up large-scale turnkey solar plant projects in Algeria and Qatar to offset its revenue decline in equipment sales, highlighting the gloominess of the current solar market. The situation is similar in the wind sector. Due to excess capacity and dropping turbine prices, Vestas, the world’s largest wind turbine maker, reported a €166 million loss for the first time in 6 years in 2011. Even Chinese low cost manufacturers have been struggling. Sinovel, the largest Chinese wind turbine maker, announced a 73% profit decline and Xinjiang Goldwind, the second largest Chinese wind turbine maker, predicted that its net income might drop to between zero and 20.6 million yuan.

The over-capacity issue has already driven some industry consolidation. However, the process may take longer than most expect for a number of reasons. The solar and wind sectors are largely dominated by Chinese manufacturers. Some of them are supported by their local governments, which are very reluctant to let the struggling manufacturers go bankrupt as it might damage their local economies. The resultant effect is a long-drawn-out industry consolidation process in the sectors, hammered in the meantime by continued over-capacity. Nonetheless, the valuation of the renewable energy sector has dropped to such a low level that might trigger more mergers and acquisitions. There was a rumour on 16 April that Sinovel and Xinjiang were considering taking over Vestas, although Goldwind has already dismissed the rumour on the basis that their technologies are not compatible.

In view of this dichotomy, we see more investment opportunities within energy efficiency themes that span across a wide range of sectors from transportation to buildings, industrials, IT, lighting and energy storage. Nevertheless, despite the bleakness of the renewable energy sector today, it will, in our view, represent a major part of the global economy in the future. More investments will be made in renewable energy and while we’re currently on the sidelines, we will continue to look for value opportunities in this rapidly changing and dynamic space.

Foresight Group LLP completed an acquisition of the trade and assets of WHEB Asset Management LLP (WHEB). By way of Novation, Foresight Group LLP now acts as investment manager. Foresight Group LLP uses the trading names WHEB and WHEB Asset Management.

Foresight Group LLP and is authorised and regulated by the Financial Conduct Authority with Firm Reference Number 198020 and has its registered office at The Shard, 32 London Bridge Street, London, SE1 9SG. FundRock Partners Limited (formerly Fund Partners Limited) remains the Authorised Corporate Director of the Funds and is authorised and regulated by the Financial Conduct Authority with Firm Reference Number 469278 and has its registered office at Hamilton Centre, Rodney Way, Chelmsford, England, CM1 3BY.

Important Notices:

The price of shares (“Shares”) in FP WHEB Sustainability Impact Fund, WHEB Sustainable Impact Fund or WHEB Environmental Impact Fund may increase or decrease and you may not get back the amount originally invested, for reasons including adverse market and foreign exchange rate movements. Past performance does not predict future returns. Any performance shown does not take account of any commissions and costs charged when subscribing to and redeeming shares. The Fund invests in equities and is exposed to price fluctuations in the equity markets and focuses on investments in mid-sized companies in certain sectors so its performance may not correlate closely with the MSCI World Index (the benchmark). For full risks, please see fund prospectus on www.whebgroup.com. This information is issued by Foresight Group LLP. We have exercised reasonable care in preparing this information including using reliable sources. However, we make no representation or warranty relating to its accuracy, reliability or completeness or whether any future event may or may not occur. The information (including the MSCI information) is intended for information purposes only and does not constitute or form part of any offer or invitation to buy or sell any security. Any opinions constitute our judgment as of the date published and are subject to change without notice. We do not offer legal, tax, financial or investment advice. The information should not be relied upon to make an investment decision. Any such investment decision should be made only on the basis of the Fund scheme documents and appropriate professional advice.

WHEB Environmental Impact Fund

The Manager of the Fund is FundRock Management Company S.A., authorised and regulated by the Luxembourg regulator to act as UCITS management company and has its registered office at 33, rue de Gasperich, L-5826 Hesperange, Grand-Duchy of Luxembourg. The Fund is registered for distribution to professional investors in the United Kingdom. It is not available to investors domiciled in the United States.

FP WHEB Sustainability Impact Fund

FundRock Partners Limited is the Authorised Corporate Director of the Fund and is authorised and regulated by the Financial Conduct Authority with Firm Reference Number 469278 and has its registered office at 6th Floor Bastion House, 140 London Wall, London, EC2Y 5DN. The state of the origin of the Fund is England and Wales.

WHEB Sustainable Impact Fund

The Manager of the Fund is FundRock Management Company S.A., authorised and regulated by the Luxembourg regulator to act as UCITS management company and has its registered office at 33, rue de Gasperich, L-5826 Hesperange, Grand-Duchy of Luxembourg. The state of the origin of the Fund is Ireland. The Fund is registered for distribution to professional investors in Austria, France, Germany, Italy, Luxembourg, Norway, Singapore, Sweden and the United Kingdom, and is registered for offering to retail investors in Switzerland, Denmark and the Netherlands. The Fund is also available for professional investors in Belgium and Hong Kong. It is not available to investors domiciled in the United States.

For FP WHEB Sustainability Impact Fund and WHEB Sustainable Impact Fund, the Representative in Switzerland is ACOLIN Fund Services AG, Leutschenbachstrasse 50, CH-8050 Zurich, whilst the Paying Agent is NPB Neue Privat Bank AG, Limmatquai 1/am Bellevue, P.O. Box, 8024 Zurich.  The relevant documents such as the prospectus, the key investor information document (KIIDs), the Articles of Association as well as the annual and semi-annual reports may be obtained free of charge from the representative in Switzerland.

The MSCI information may be used for your internal use, may not be reproduced or re-dissseminated in any form and may not be used as a basis for or a component of any financial instruments or products or indices. Historical data and analysis should not be taken as an indication or guarantee of any future performance analysis, forecast or prediction. The MSCI information is provided on an “as is” basis and the user of this information assumes the entire risk of any use made of this information. MSCI, each of its affiliates and each other person involved in or related to compiling, computing or creating any MSCI information (collectively, the “MSCI Parties”) expressly disclaims all warranties (including, without limitation, any warranties of originality, accuracy, completeness, timeliness, non-infringement, merchantability and fitness for a particular purpose) with respect to this information. Without limiting any of the foregoing, in no event shall any MSCI Party have any liability for any direct, indirect, special, incidental, punitive, consequential (including, without limitation, lost profits) or any other damages (www.msci.com).

Join our mailing list

Sign up below for regular email updates about our funds, our impact, our events.
{{ errors[0] }}
{{ errors[0] }}
{{ errors[0] }}
{{ errors[0] }}
{{ errors[0] }}
{{ errors[0] }}
WHEB is now a part of Foresight Group.
Authorised and regulated by the Financial Conduct Authority
Copyright 2025© WHEB. All rights reserved Made by Thursday