Black­Rock blames loan cri­sis for clean-en­ergy out­flow

The Pak Banker - - Company& -

MADRID: Re­new­ableen­ergy funds suf­fered record out­flows this year, re­vers­ing their di­rec­tion from 2009, as money man­agers in­clud­ing Black­Rock Inc. said the credit crunch dimmed the out­look for so­lar and wind power projects.

In­vestors pulled 931 mil­lion eu­ros ($1.2 bil­lion) in the first 10 months, al­ready eclips­ing the full-year with­drawals in 2008 when the global fi­nan­cial cri­sis spooked in­vestors, ac­cord­ing to data com­piled by Lip­per Inc. Last year cleanen­ergy funds cap­tured 1.3 bil­lion eu­ros of new money, Lip­per said.

Tighter loan terms for clean-power projects, greater com­pe­ti­tion from Chi­nese man­u­fac­tur­ers and re­duced sub­si­dies from Euro­pean gov­ern­ments ham­mered some of the stocks that had been fa­vorites of fund man­agers be­fore 2010, such as Ves­tas Wind Sys­tems A/S, the world's largest wind-tur­bine maker. Funds that held oil and gas com­pa­nies were gain­ers, a sep­a­rate sur­vey said.

"The new-en­ergy mar­ket and re­lated stocks were sig­nif­i­cantly im­pacted by the credit cri­sis," Robin Batch­e­lor, man­ager of the $2.9 bil­lion Black­Rock New En­ergy Fund, said in an e-mail. Re­duced de­mand for en­ergy and "the fact that gov­ern­ments were per­ceived to have many new wor­ries on their agenda com­bined to cre­ate a dif­fi­cult en­vi­ron­ment," he said. New York­based Black­Rock is the world's largest money man­ager.

Con­ven­tional en­ergy stocks saw the biggest in­crease in hold­ings and were the largest bets for funds, ac­cord­ing to a Bank of Amer­ica Mer­rill Lynch sur­vey of 209 money man­agers con­trol­ling $569 bil­lion, con­ducted Dec. 3 to Dec. 9.

The clean-en­ergy sell-off is a blow to pol­i­cy­mak­ers in the U.S., Ja­pan and the Euro­pean Union who pledged last year in Copen­hagen to ramp up in­vest­ment as they chan­nel $100 bil­lion a year in cli­mate aid to de­vel­op­ing na­tions by 2020.

The with­drawal ex­tended to en­vi­ron­men­tal funds, which had net with­drawals of 373 mil­lion eu­ros, also a record, ac­cord­ing to Lip­per, a unit of New York-based Thom­son Reuters Corp.

At Black­Rock, whose clean-tech fund is one of the world's largest, as­sets dropped to $2.9 bil­lion on Oct. 31 from $3.8 bil­lion 12 months ear­lier, and the fund's value fell 8 per­cent. That sug­gests clients pulled about 560 mil­lion eu­ros, or 15 per­cent of as­sets, ac­cord­ing to Bloomberg cal­cu­la­tions.

A Black­Rock spokes­woman didn't im­me­di­ately com­ment on the cal­cu­la­tion. Batch­e­lor de­clined to com­ment on out­flows.

Cli­mate ne­go­tia­tors meet­ing in Can­cun, Mex­ico, this month agreed to limit global warm­ing to 2 de­grees Cel­sius (3.6 de­grees Fahren­heit) with­out reach­ing a deal on how to achieve it. Cur­rent pledges by in­di­vid­ual na­tions will lead to 4 de­grees of warm­ing by 2100, ac­cord­ing to Cli­mate In­ter­ac­tive sci­en­tists who model warm­ing sce­nar­ios.

" There was pos­i­tive progress, but with­out t he ur­gency or on the scale needed to meet the 2-de­gree goal," said Peter Sweat­man, chief ex­ec­u­tive of­fi­cer of Cli­mate Strat­egy & Part­ners, a Madrid-based con­sult­ing firm. "The warn­ing lights are flash­ing red."

The worst per­form­ing en­vi­ron­men­tal or clean en­ergy fund in the Lip­per data­base that tracks re­turns of in­di­vid­ual pools was Aze­mos As­set Man­age­ment AG's Hornet Re­new­able En­ergy Fund II, which lost 24pc in the 12 months to Sept. 30 in­vest­ing in stocks such as SMA So­lar Technology AG and Meyer Burger Technology AG. -Bloomberg

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