Earlier this year, Jennison rebranded its nearly three-year-old PGIM Jennison Carbon Solutions fund to the PGIM Jennison Global Power Solutions fund, but this was not due to a change in approach, according to Nick Samuels, client portfolio manager at Jennison.
Instead, this was an attempt to realign investors’ expectations, which sometimes became distorted. It was also an attempt to reflect how much the opportunity set has changed in power and energy since the original fund launched, he said.
“This was the first fund that we brought straight to Europe, and for us the way we used to describe it and the name used for it caused some confusion,” he conceded. “People have very specific ideas of what a decarbonisation fund should be.”
Investors believed the fund was an Article 9 ESG fund or a pure transition fund, which led to misunderstandings of what the fund did, he said. For example, investors frequently questioned their holdings in nuclear or gas companies, which would not fit in a pure carbon transition or sustainable fund, he said.
“When you put the name carbon in there, there’s a certain perception you need to get over even before the meeting starts,” Samuels said.
See also: PGIM launches global all-cap Carbon Solutions Fund
Instead, the product was always planned to be a more thematic strategy, which was looking to “take advantage of the changing energy supply demand dynamic that was showing up,” he said.
But for the team, buying natural gas or nuclear is a transition away from “dirty” energy coal, even if most investors would not have assumed that based on the name.
“You quickly realise that the person who called you up asking about the fund is after something completely different than what we were offering,” he said. In that sense, he saw it more as a way of providing clarity on the portfolio.
“We haven’t really changed the way that we run the fund, or the types of stocks we’re picking, but the way that the theme is described is slightly different, and the name should reflect that,” the Jennison manager said.
On top of this, the opportunity set has changed dramatically since the fund was launched, according to Samuels.
“When we launched in August 2023, it was pre-AI, pre-data centres, after years of flat energy demand and the de-carbonisation theme was still just about replacing fossil fuels,” he continued.
See also: Investor interest in energy transition and decarbonisation ‘rapidly expanding’ across asset classes
In a post-ChatGPT and AI world, those trends do not hold, and investors cannot focus purely on decarbonisation, he said.
Power demand now faces what Samuels called a “trilemma” – it needs to be reliable, affordable and cleaner. This is much more challenging when data centres demand more power than some large European countries needed per year.
Decarbonisation or low-carbon energy is still one of the team’s three main themes, but it now sits alongside electrification and energy efficiency.
“You have to think of decarbonisation at the same time, as meeting this massively increased demand for power which three years ago just were not there.”
Power demand has surged due to AI data centres, which Samuels and the Jennison team expect to be a multiple-year trend with no easy answer.
Most data centres are not even online yet, he noted, and the real pinch point isn’t the availability of chips or memory; it’s the power supply, he said.
See also: Watts it worth: Why smarter infrastructure will power the AI economy.
This gives plenty of opportunities to find interesting stocks within themes such as decarbonisation, electrification and energy efficiency that can participate in the AI development without worrying about who wins.
“We’re investing in the ground floor, the infrastructure and machinery that it will take for that to work,” he said.
For example, Samuels pointed to Siemens Energy, the German-based energy corporation, one of the main power suppliers for AI data centres.
Demand for their generators is so high that they have sold out their stock until at least 2030, giving them almost half a decade of earnings visibility, purely because they know that demand from hyperscalers is so high.
Since inception in September 2023 to the end of May 2026, the fund has delivered a 19.62% annualised return compared to a 20.8% return for the MSCI ACWI IMI index, according to data from PGIM’s website.
