Sheryl Lee, Ishika Mookerjee, and Christopher Udemans of Bloomberg report that hedge funds are betting against the green future. The $5 trillion industry’s move against clean energy and green technology may prove more damaging than political pushback over “woke” capitalism. They Write:
The fast money on Wall Street has taken a close look at key sectors in the green economy and decided to bet against them.
Despite vast green stimulus packages in the US, Europe and China, more hedge funds are on average net short batteries, solar, electric vehicles and hydrogen than are long those sectors; and more funds are net long fossil fuels than are shorting oil, gas and coal, according to a Bloomberg News analysis of positions voluntarily disclosed by roughly 500 hedge funds to Hazeltree, a data compiler in the alternative investment industry. […]
Per Lekander, founder of $2.7 billion London-based hedge fund Clean Energy Transition LLP, says solar is among green sectors that have been “more or less terrible” for the past three years. “Solar is probably structurally screwed. I think there are pockets, but wherever China is strong, I’m quite skeptical.”
In short, “wherever China is dominating, run for the hills,” Lekander said. […]
Managers in the $5 trillion hedge fund industry say the reason is obvious: Despite the promises, clean energy and green technology stocks have lagged far behind the broader market. Deep-pocketed institutions are concluding that many climate investments won’t pay off as quickly, or as lucratively, as they’d hoped. […]
“It’s very difficult for a hedge fund to price in a geopolitical risk for a length of time,” said George Boubouras, head of research at K2 Asset Management in Melbourne. And that means there’s a “long winter ahead” for the green transition trade.
Read more here.
