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Sustainability - as a focus on investment themese is here to stay (and prosper) -
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ANRIC BLATT
ChairmanGOBAL FUND EXCHANGE GROUP
PartnerTERRA PRIMA PARTNERS LLC
Sustainability as an Asset Class
FOOD, WATER & ENERGYAND WHY IT’S A MUST
“Treat the Earth well. It was not given to you by your parents.
It was loaned to you by your children.”
“Treat the Earth well. It was not given to you by your parents.
It was loaned to you by your children.”
7 BILLION AND CLIMBING
3
30% of the world's arable land will be unusable by 2020
50% may be unusable by 2050
with dire consequences for investors, consumers and governments.
Namib Desert, Namibia 2007
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0
2
5
7
9
19501987
Today2040
Population in BillionsArable Land in hectares / person
Population growth & arable land
0
175
350
525
700
1970 1980 1990 2000 2010 2020 2030 2040 2050
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POPULATIONAVERAGE CALORIES PER PERSONFEED GRAIN NEEDED - All Indexed back to 100 in 1970
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0
175
350
525
700
1970 1980 1990 2000 2010 2020 2030 2040 2050
POPULATIONAVERAGE CALORIES PER PERSONFEED GRAIN NEEDED - All Indexed back to 100 in 1970
0
175
350
525
700
1970 1980 1990 2000 2010 2020 2030 2040 2050
POPULATIONAVERAGE CALORIES PER PERSONFEED GRAIN NEEDED - All Indexed back to 100 in 1970
“It takes 1,000 tons of water to make 1 ton of grain and 7 tons of grain to produce 1 ton of beef.
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“If we unbalance nature, mankind will suffer. We must consider future generations: a clean environment is a human right like any other. It is therefore part of our responsibility toward others to ensure that the world we pass on is as healthy as, if not healthier than, we found it.
“go long agriculture and water and go to the beach ......
... put those investments in the bottom drawer for 10 years.
Agriculture and water would even beat energy investments”
Invest in agriculture and water, says BlackRock CEO Larry Fink
we are extracting fresh water at
rates up 100 x the natural
replenishment rate.
To avoid political turmoil and regime changes, governments
have no choice but to continue investing in
food, water and energy infrastructure
THE CALM BEFORE THE STORM
Sir David King, Chief Scientific Adviser UK Government
“The global battle for natural resources – from food and water to energy and precious metals – is only beginning, and will intensify to proportions that could mean enormous upheavals for every country.”
If we unbalance nature mankind will suffer.
Today with over 2 Billion people who are malnourished, we must address a crisis unfolding.
The facts are undeniable and the outcome subject to the actions taken by you and me today.
100,000 people die every day of starvation.
The world's geopolitics will be shaped by the global race for four strategic resources: food, water, energy & metals
10,000 species have gone extinct in just the past 100 years
if bee populations fall too far, our food supplies will be seriously threatened . . .
Over 70% of our food is pollinated by bees . . . .
5.9 Million (1947)
2.62 Million (2012)
1.8 Million (2013)
4.5 Million (1980)
This crisis for mankind and our planet is simultaneously our greatest challenge, as well as a once in a lifetime investment opportunity for visionary investors.
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by 2025 the agricultural sector will experience serious water shortages. Crop losses due to water scarcity could be as high as 350 million metric tons per year, slightly more than the entire crop yield of the U.S.
International Food Policy Research Institute (IFPRI)
Leave a Legacy that you would like to inherit
24
WHAT IF
WHAT IF WE, DO NOTHING ?
WHAT, IF ?
29WHAT IF WE CONTINUE DIGGING ?
30
WHAT IF WE KEEP BURNING?
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Amazon Deforestation 2012. Since President Dilma Rousseff took office in Jan. 2011, she has reversed deforestation laws
WHAT IF WE KEEP CUTTING?
DOWN OUR FORESTS
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Amazon Deforestation 2012. Since President Dilma Rousseff took office in Jan. 2011, she has reversed deforestation laws
WHAT IF WE KEEP CUTTING?
WHEN WILL IT STOP ?
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KEEP DISCARDING ?
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WITHOUT CONSEQUENCES
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Wondering why our children are sick ?Kansas, July 2nd, 2007
WHAT IF WE, CONTINUE POLLUTING ?
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Fire at the Chevron oil refinery in Richmond, California, August 6, 2012
WHY DO WE KEEP BURNING?
enough solar energy hits the earth in one single hour
WHEN
to power the entire globe for a full year.
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A view of an illegal oil refinery is seen along a creek outside the oil hub city Port Harcourt in Nigeria's Delta region.
WHAT IF WE KEEP LOOKING THE OTHER WAY?
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In a world where, over 1.4 billion people – 20% of the
world’s population . . .
That’s 20% of the world’s population
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. . . live in areas where the limits of sustainable water use have already been
reached or breached.
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n o k i d h u n g r y . o r g
when already
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Deepwater Horizon, Gulf of Mexico
WHEN EVERY YEAR WE KILL MORE
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Yangtze River, Sept 2012
Dinner, Seriously ?
WHEN THIS SEEMS NORMAL ?
441 billion people lack enough water to simply meet their basic needs. World Health Organization
WHEN ALREADY 80 COUNTRIES HAVE
WATER SHORTAGES
45
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ARE WE GOING
TO
47
WHEN
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DRINKING THE COOL AID
ARE WE GOING TO KEEP
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“Slow down”Panama, Sept 2012
WHAT IF WE HAVENT EVEN
SEEN THE EFFECTS OF CLIMATE CHANGE
51. . . . JUST THE BEGINNING
WHAT IF THIS IS ...
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what if these are your kids ?
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Rio de Janeiro
AND THIS IS . . . .
... THEIR DINNER TONIGHT
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Bangladesh Garbage dump or playground ?
AND THIS IS . . . .
... THEIR BIRTHDAY PARTY
55FOOD, WATER & ENERGY
56
AND THIS IS . . . .
... OUR LEGACY ?
OR ARE YOU GOING TO TAKE ACTION ?
WATER OFF A DUCK’S BACK ?
OR ARE YOU GOING TO TAKE ACTION ?
WATER OFF A DUCK’S BACK ?
- amidst these challenges
WE MUST FIND THE PROFIT OPPORTUNITIES
OBSTACLE = OPPORTUNITY
OBSTACLE
OPPORTUNITY
PROFIT
GO
60
IS THIS . . .
. . . OR THE BEGINNING
GLOBAL FUND EXCHANGE . COM
NEW YORK + 1 212 570 7970 HONG KONG +852 8174 6688
TERRA PRIMA PARTNERS . COM
AND NOW, BACK TO MAKING MONEY
62
Global energy demand to increase 50% by 2030
Weather & climate anomalies
Population growth of80 million people/year
Significant infrastructure underinvestment since 2008
Significant stress on global food supply
Rapid industrialization & urbanization of emerging markets
Severe water stress & major increases in water demand
China, India & developing world natural resource consumption
Peak Oil vs. Peak Cheap Oil
China’s race to super power needs Energy, Water, Agri & Resources
WHY ? BECAUSE THEY ARE MUST OUTCOMESGlobal shift towards lower carbon
energy & CO2 use
Population and income growth – the two most powerful forces behind rising
global demand for energy, water and natural resources.
Weather & climate anomalies
Population growth of80 million people/year
Significant infrastructure underinvestment since 2008
Significant stress on global food supply
Rapid industrialization & urbanization of emerging markets
Severe water stress & major increases in water demand
China, India & developing world natural resource consumption
Global energy demand to increase 50% by 2030
Peak Oil vs. Peak Cheap Oil
Population and income growth – the two most powerful forces behind rising global demand for energy, water and natural resources.
China’s race to super power needs Energy, Water, Agri & Resources
WHY ? BECAUSE THEY ARE MUST OUTCOMES
Investments in Water
Investments in Energy
Investments in
Agriculture
Clean Energy Investments
Global shift towards lower carbon energy & CO2 use
Natural Resource &
Commodities
MARKET DRIVERS
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ENERGY SUPPLY SHIFT
ENERGY PRICE VOLATILITY
WATER SCARCITY
BUILDING / LIGHT EFFICIENCY
GRID UPGRADES
NEW TRANSPORT SOLUTIONS
DECLINING ARABLE LAND CONSUMER
Evolving economics driving a shift toward renewables, natural gas, nuclear, and away from coal and oil. Shale gas is changing the energy landscape.
Organic and efficient products experiencing secular growth. Consumer driven demand for smart technology taking off
Massive capital spending required to upgrade aging transmission and distribution infrastructure to a smart grid.
Energy cost volatility, regulatory changes and cost savings initiatives driving investment.
Electric and natural gas vehicles approaching mainstream adoption. THANK YOU ELON
As per capita incomes rise, expanding protein consumption puts the pressure on agriculture yield, this drives technology and investment.
Supply challenges complicated by accelerating water demand and increasing concerns with water quality. Climate change is hitting home
Security concerns and the recognition of a need for more diversified sourcing, as well as a perception of “peak oil” leads to supply constraints.
TERRA PRIMA PARTNERS . COM
WAYS TO INVEST WITH IMPACT
66
EQUITY FUNDS
SECTOR FOCUSED FUNDS
REAL ASET FUNDS
COMMODITY FUNDS
OTHER
Public Long OnlyMutual FundsETF’sPublic HedgePrivate EquityVenture Capital
HybridsBondsCredit Funds
Ag LandTimberClean (er) EnergyWater rights & entitlementsNatural resourcesGreen infrastructureGreen Buildings Property REITS
AgricultureEnergyMLPGasClean (er) EnergySolarWindWaterNatural resourcesImpact Assets
TERRA PRIMA PARTNERS . COM
Systematic (CTA)Energy Relative ValueMetals
AGRICULTURE - THE VALUE CHAIN
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WATER
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THE SHALE GAS OPPORTUNITY
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CLEAN ENERGY OPPORTUNITY - SOLAR
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CLEAN ENERGY - WIND
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CLEAN ENERGY - EFFICIENCY - LED LIGHTING
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SUSTAINABILITY AS AN ASSET CLASS
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ENORMOUS UNIVERSE
RESEARCH - NOW MORE THAN EVER
PORTFOLIO CONSTRUCTION
CONSTANT INNOVATIONS
ECONOMIES OF SCALE
GEOPLITICAL FACTORS
RISK MANAGEMENT EXIT STRATEGY
25+ Different Asset ClassesHundreds of sub-sectorsGeographic variances
Knowing when to exit and reinvest is critical. Kick the buy high - sell low habit.
Diversification amongst multiple geographies, asset classes and managers takes deep pockets
New technology coming to market daily, need to remain flexible
Fed Monetary PolicyRegulation & PolicySubsidies
Full time attention to changing conditions, profit taking and portfolio rebalancing
Combining different asset classes to reduce risk, reduce volatility and improve returns
QualitativeQuantitativeForensic
OR JUST GIVE IT TO THIS GUY
74HE’LL DO SOMETHING GOOD WITH IT
THANK YOU TO PETER FUSARO
O P P O R T U N I T Y
ANRIC BLATT
+1 212 888 71 57AB @ TERRA PRIMA PARTNERS . COM
Do not follow where the path may leadgo instead where there is no pathAND CAREFULLY LEAVE A TRAIL
