Q: Which asset classes, sectors or strategies are attracting your attention and why?
Working within a thematic strategy there are several structural themes that draw our attention. We are currently focused on US datacentre power demand, which is set to more than double by the end of the decade (50GW by 2030, up from 21GW in 2023). The renewables sector should benefit as hyperscaler companies like Microsoft, Google, Meta and Amazon have all made net-zero pledges, which will increase their demand for clean energy capacity.
We have also seen sharp rises in the rollout of utility scale solar production in states including Texas, Ohio and Florida resulting in an attractive investment opportunity.
Q: How do you see sustainable and ESG-oriented investing evolving from here?
We will start to see more impact-focused strategies as socially conscious generations (gen-Z and millennial investors) look to allocate their capital to strategies that aim to make a positive difference in the world.
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In ESG investing, we will see a less narrow, more nuanced approach to assessing companies, where fewer businesses are automatically thrown into the ‘penalty box’ and there is a greater effort by investors to collaborate, understand and partner with management, to improve their operations via engagement.
Access to relevant ESG and impact data underpins the efficacy of these approaches and, as such, we will see great improvements as these disclosures become more standardised across the marketplace.
Q: What will be different about the investment sector a decade from now?
The way we interact with data will be enhanced and soon we will be able to engage with visual analyses of trends more easily than crunching numbers in Excel. Future iterations of large language models will be trained on corporate datasets and will improve how we download, index and absorb relevant information.
This will increase efficiency for analysts and portfolio managers trying to understand the drivers of business models and creating forecasts.
Lastly, the demographic composition of the industry will become more diverse as larger numbers of women and ethnic minorities enter and progress through the profession.
Read the rest of this article in the October issue of Portfolio Adviser magazine
