Over the past few years, I’ve been fascinated with the cleantech venture capital wave that has gripped my home town of San Francisco. Investment in cleantech has gone from around $500 million in 2001 to well over $8 billion in 2008 (despite the credit crisis). Whether it is the drive to build a more efficient server or a battery powered car that does 0-60 in under 4 seconds, cleantech appears to be the “new, new, new thing” in Silicon Valley (to borrow words from Michael Lewis).
As such, I think cleantech would be a great investment for commodity based SWFs. Since sponsors of such funds typically rely on resources that will lose-out if the cleantech revolution succeeds, these investments would offer a very nice hedge over a long-term time horizon (~30 years). Indeed, getting in on the ground floor of cleantech would attenuate any loss of revenues associated with a technological advance that reduces our dependence on hydrocarbons.
It appears one SWF has finally gotten the message. I was reading this article this morning about the growing momentum in cleantech and came across the following:
“A variety of investors continue to support the cleantech sector. Of the top 10 venture capital-led deals in Q3 09, four included private equity investors, three included corporate investors, and one included a sovereign wealth fund.”
Watch this space…
3 Responses to “Commodity SWFs Should Invest in Cleantech”