GLG RI Sustainable Energy Transition

GLG RI Sustainable Energy Transition strategy is a bottom up, global long-short equity strategy focused on Energy Transition. The team will seek to reward industry leaders with credible plans to reduce emissions while engaging with laggards to promote a change in behaviour.* The team deliberately include the oil and gas sector, in order to accelerate the transition to cleaner energy.

Managed by Firmino Morgado (+25 years’ experience) and Filipe Bergana (+15 years’ experience)
Multi-discipline, cross-sector approach built on experience from other transition processes
Responsible, sustainable approach to Energy Transition that allocates capital to drive change

Rewarding leaders with credible plans to reduce emissions while engaging with laggards to promote a change in behaviour*
We believe the strategy has a contrasting approach from other ESG strategy’s which outright avoid contentious – although crucial – sectors

*The companies that the team view as leaders will be considered for the long book whilst the companies viewed as laggards will be considered for the short book.

We believe the need for the concerted action on climate change has never been more acute. With the world on course to miss the Paris Climate Agreement’s 1.5 Celsius warming target, and current EU efforts to reach a net zero carbon emissions economy by 2050 are also falling behind. We are at a critical time with global energy usage expected to grow 50% by 2050.*

Energy production is still dominated by traditional oil and gas companies and renewable sources such as wind and solar power are not expected to develop fast enough to simultaneously replace fossil fuels in the generation mix and fulfil the growth of world energy demand.

Any serious attempt to combat climate change must focus on transforming the way we produce our energy. The energy sector is by far the largest producer of carbon dioxide in the world economy. Any serious attempt to combat climate change must focus on transforming the way we produce our energy.

The Strategy’s philosophy looks to invest in companies that can make energy transition a reality while shorting/engaging with laggards in order to incentivise positive change in carbon and GHG emissions reduction. The team utilises a responsible and sustainable approach to Energy Transition that allocates capital to drive change. The process looks to reward leaders with credible plans to reduce emissions while actively engaging with laggards to promote a change in their behaviour.

The Strategy is primarily focused on global energy, utility and transport companies which seek to drive impactful change towards more sustainable energy. The Strategy follows a bottom-up investment process focused on cash flow generation. It is structured around three long-term investment themes with well-defined strategies to capture alpha opportunities.

Decarbonisation of power
Electrification of the economy
Innovation of low carbon fuels

The investment process follows a science-based approach to E, S and G with analysis backed by proprietary ESG tools and independent providers. The Strategy is managed to achieve a responsible impact investment with the outcome based on metrics such as carbon dioxide emissions, greenhouse gases, and the company’s intended year of net neutrality. The team will look at both the current state of these metrics, but also the path of reduction and comparison with peers, engaging with companies to analyse the credibility and feasibility of the net carbon neutrality targets, while also encouraging more ambitious targets.

Approach	Alternative
Asset Class	Equity
Geographic Focus	Global

*Source: European Climate Foundation, BAML; as of December 2020.

Firmino Morgado

Portfolio Manager, Man GLG

Filipe Bergaña, CFA

Portfolio Manager, Man GLG

Man offers a comprehensive suite of investment solutions and formats that can be tailored and optimised to meet specific client needs. Our investment solutions offer optionality including: liquidity, control, investment restrictions, investor customisations and transparency.

UCITS

Alternative investment funds

US 40 ACT

Regional funds

Separate accounts

Advisory mandates

Managed accounts

Access to investment products and mandate solutions are subject applicable laws and regulations including selling restrictions and licensing requirements. Investment solutions listed above may not be compatible for all investment strategies and may be subject to minimum subscription requirements. Regional Funds: In additions to UCITS and AIFs registered across the EEA, a number of investment strategies are available in vehicles registered in Chile, Netherlands, Hong Kong, Japan, Singapore, South Korea and Switzerland.

View our strategies

One should carefully consider the risks associated with investing, whether the strategy suits your investment requirements and whether you have sufficient resources to bear any losses which may result from an investment:

Investment Objective Risk - There is no guarantee that the Strategy will achieve its investment objective.

Market Risk - The Strategy is subject to normal market fluctuations and the risks associated with investing in international securities markets and therefore the value of your investment and the income from it may rise as well as fall and you may not get back the amount originally invested.

Counterparty Risk - The Strategy will be exposed to credit risk on counterparties with which it trades in relation to on-exchange traded instruments such as futures and options and where applicable, ‘over-the- counter’("OTC","non-exchange") transactions. OTC instruments may also be less liquid and are not afforded the same protections that may apply to participants trading instruments on an organised exchange.

Currency Risk - The value of investments designated in another currency may rise and fall due to exchange rate fluctuations. Adverse movements in currency exchange rates may result in a decrease in return and a loss of capital. It may not be possible or practicable to successfully hedge against the currency risk exposure in all circumstances.

Liquidity Risk - The Strategy may make investments or hold trading positions in markets that are volatile and which may become illiquid. Timely and cost efficient sale of trading positions can be impaired by decreased trading volume and/or increased price volatility..

Concentration Risk - The Strategy invests in a limited number of investments may be held which can increase the volatility of performance.

Financial Derivatives - The Strategy may invest in financial derivative instruments ("FDI") (instruments whose prices are dependent on one or more underlying asset) typically for hedging purposes. The use of FDI involves additional risks such as high sensitivity to price movements of the asset on which it is based. The use of FDI may multiply the gains or losses.

Leverage - The Strategy's use of FDI may result in increased leverage which may lead to significant losses.

Single (limited) Industries - The Strategy focusses on single (or a limited number of) industries therefore, may be susceptible to greater risks and market fluctuations than investment in a broader range of investments covering different economic sectors.

Total Return - Whilst the Strategy aims to provide capital growth, a positive return is not guaranteed over any time period and capital is in fact at risk.