Opportunities Grow In Resource Optimization

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    Investors should consider strategic long-term allocations in resource optimization opportunities, says Simon Gottelier, senior portfolio manager at Impax Asset Management. Speaking on ‘Investing Globally in Solutions to Resource Scarcity’ at a BNP Paribas Investment Partners Resource session, he said there are several long-term trends ‒ ranging from economic growth in emerging markets to the impact of climate change on water supplies ‒ driving demand for products and services that optimize the delivery and use of resources globally. Much of the demand is coming from emerging markets such as China and India. Growth is these countries is putting tremendous strain on resources, especially as they become more and more wealthy and demand more resources. This demand is driving up prices for resources. Resource optimization is a key solution for resource demand, but so far investors have focused on resource supply and resource optimization is an under allocated opportunity. It is no longer just about renewable energy only as companies are responding with innovative solutions in energy efficiency, alternative energy, resource recovery, and food and agricultural markets. And the universe of these companies is growing. There are new 2,400 companies operating in this area, compared to just 250 in 1999. The universe is very diverse with cyclical, defensive, and special situation opportunities.