Nicolas Rochon, manager of Financière de Champlain's Performance Environnement fund, is backing wind over solar stocks for the short term, pointing to a lack of visibility in the latter.
Rochon, who also manages the firm's Performance Environnement International fund and heads up its environmental investments team, admits that small and mid-sized companies in the alternative energy sector have had a difficult few months. Alternative energy is a key investment area for his fund alongside water treatment and waste management.
Although he is bullish on the prospects for solar stocks over the medium to long-term, he says it is difficult to have strong positions in this area at the moment due to the lack of visibility in the Spanish and US markets. He is therefore unsurprised by the recent sell-off in solar stocks. However, he does see a new German law which increased solar-generated electricity repurchasing rates as 'good news for the German market'.
More specifically within the solar sector, he pinpoints solar thermal energy as having 'huge potential growth for the next five to 10 years'. He is playing this theme through his holding in Solar Milennium, which specialises in the construction and development of solar thermal power plants.
Rochon is seeing the wind sector as more attractive than solar, due to strong demand for wind power in China and Europe, particularly on the back of rising energy prices. He is expecting this growth in China to continue. Key wind power holdings include wind turbine manufacturers Gamesa, Nordex and Suzlon. The Paris-based manager recently reduced his fund's exposure to Vestas, another wind turbine manufacturer.
'Players who have focused on wind will have a good performance over the coming months,' he says.
Like Pictet F (LUX)-Water managers Hans Peter Portner, Philippe Rohner and Louis-Mathieu Perrin, Rochon is finding Brazil-based water companies attractive and currently holds Sabesp in his international portfolio.
He pinpoints China Power New Energy as his 'top pick' for the Performance Environnment International fund. He is positive about his fund's exposure to China, pointing to the government's increased support for wind power. Likewise, he remains positive about his holding in Japan Wind Development due to recent government support.
