September 19, 2007
Canada is Coming Clean: First Canadian Global Clean Energy Fund Launched
by Anne Moore Odell
Criterion Investments has announced its Global Energy Fund, reflecting a growing enthusiasm for
clean energy by investors, companies and governments.
Canadian investors interested in helping reduce carbon emissions and companies working to provide
greener, cleaner energy have a new fund that focuses on global clean energy. Criterion Investments, headquartered in Toronto,
Ontario, now offer the Criterion Global Clean Energy Fund. Pictet Asset Management has been named the Fund's investment
"Clean energy and energy efficiency is on
everyone's radar screens, but more importantly the clean energy sector has matured; it's no longer
a nascent industry," said Ian McPherson, President of Criterion Investments. "The clean energy
investment universe, as identified by the investment manager has a market cap of $1.4 trillion with
capital flows of $70 billion a year right now."
This new Fund is quite broad in its
potential universe of clean energy companies. It will consider companies at every phase of the
transition to cleaner energy, be it research, equipment and/or energy efficiency. Solar, wind, and
hydroelectric companies will also make up part of the portfolio.
Businesses that help
with energy efficiency and low-carbon energy sources like biofuels will likewise be considered. At
this time, nuclear energy is outside of the investment universe for the Fund.
Fund isn't created from an index universe, Criterion's Clean Energy Fund is designed to outperform
the MSCI Global Equity
Index over a market cycle. Criterion points out that clean energy is an untapped theme in the MSCI
Index, as the index is currently only 4% clean energy.
The Fund is diversified by region
and market cap. Forty-four percent of companies are from Europe, 39% found in North America and 15%
in developed Asia/Pacific and emerging markets. Currently the Fund is invested in 63% large cap
companies, while mid cap and small cap companies account for 24% and 11%, respectively. Two percent
of the Fund will be cash.
The Fund's investment advisor Geneva-based Pictet Asset
Management (PAM) and Criterion have an existing relationship, as PAM is the sub-advisor for
Criterion's Water Infrastructure Fund. PAM's own clean energy fund has more than $500 million in
assets and has outperformed the MSCI global equity. PAM currently has $120 billion under
McPherson stated: "Pictet is a 200-year old investment leader with a long and
successful track record in thematic investment mandates using a GARP [growth at a reasonable price]
investment philosophy. Pictet has a dedicated investment team specializing in different areas of
the clean energy sector."
"There is an increased awareness and thus interest by investors
to invest in themes supported by longer term secular trends," said Philippe Rohner, Senior
Investment Manager at Pictet and Co-manager of the Criterion Global Clean Energy Fund. "The
transition towards the need for reliable sourcing of not only cheaper, but also 'cleaner' fuels and
electricity is an example of such a secular trend."
Criterion asserts that that energy
companies could experience a 30% growth in earnings over the next three years. It declares that
concerns about the shrinking supply of oil and gas and the political unrest in energy producing
areas has helped drive the growing interest in alternative energy.
The European Union is
leading the drive to cleaner energy. In less than fifteen years, the European Union has plans to
get 20% of its total energy consumption from renewable and clean energy sources.
reality is that carbon emissions and climate change are major socio-economic concerns for us all,"
said McPherson. "This Fund does provide an opportunity tap into areas that are being driven by
undeniable environmental trends."
The Criterion Fund can be used as a Registered
Retirement Savings Plan (RRSP) eligible fund for Canadian investors. The minimum investment with
the Fund is CAN$500. It's available currency hedged or unhedged, meaning investors can decide if
they want to protect against the currency risk that can happen when investing in global markets.
The average target management expense ratio (MER) is 2.75% for currency-hedged units and 2.65% for
Although this is the first clean energy fund available to Canadian
investors, investors in the US have a growing list of clean energy funds to chose from, including
Calvert's Alternative Energy Fund launched earlier this year, Guinness Atkinson Alternative Energy
Fund, Ardsley Partners Renewable Energy Fund, New Alternatives Fund, and the Sentry Select
Alternative Energy Fund, to name a few.
"We believe it's the perfect time to offer
Canadian investors the opportunity to capitalize on the transition to cleaner energies," McPherson
told SocialFunds.com. "Concern over climate change and a worldwide drive to reduce greenhouse
gases, backed by ambitious government targets and incentives, has primed the sector for long-term
growth," he added.
Criterion Investments is an affiliate of VenGrowth Asset Management, which has over $1.1 billion in
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