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Grosskopf said he was scoffed at when he took a stake in Tesla
Motors Inc four years ago, with analysts questioning potential
demand. But the electric vehicle manufacturer's prolific growth
since has helped quiet the critics.
He said the auto industry will only become more profitable for
eco-investors as electric and hybrid vehicles turn mainstream
and fuel economy targets tighten worldwide.
"That to me is the future of the industry," the portfolio
manager said. "I don't spend a lot of time positioning in what I
think will be a declining growth environment."
Grosskopf also expects the cost of lithium batteries, a key
component of green vehicles, to fall 60 percent over the next
five years after dropping 70 percent during the last three.
"We're invested in the supply chains that are going to benefit
as electric vehicles emerge, as hybrids emerge, as alternative
energy becomes a bigger part of our mix," he said.
Grosskopf runs a C$350 million ($273 million) sustainable
investing fund at AGF targeting environmentally friendly energy,
waste, water and healthcare companies and says the subject has
never been hotter.
"In my 16 years in this area, this is by far the most meaningful
acceleration in interest and in opportunity," he said.
"Right now in the investment community, they're all talking
about climate change, they're all talking about supply chain
issues in Bangladesh, they're all talking about mining failures,
tailing pond screw-ups."
Global leaders agreed late last year to try to transform the
world's fossil fuel-driven economy within decades to arrest
global warming.
"What I'm interested in is, how is this transition to a more
sustainable economy happening and how can we position our
investors to take advantage of that," Grosskopf said.
He said the growing interest in his green strategy is led by
family trusts and endowments as well as tech entrepreneurs
looking to re-invest their fortunes in sustainable projects.
But he said large Canadian funds remain fearful of betting on
investments that could go bankrupt as easily as they could go
big.
The fund has a 5 percent exposure to Canadian companies, down
from more than half under an earlier agreement with its largest
client.
(Additional reporting by Matt Scuffham; Editing by Cynthia
Osterman)
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