This is the big one: Nick Griffin

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Imagine being able to tap into the tailwinds behind Tesla without paying a premium for it. There's an opportunity "as big as the internet" and people haven't caught on yet. Better yet,  the companies underpinning this thematic haven't yet hit large-cap status and they're ripe with the investment opportunity of a lifetime. 

In this video, Nick Griffin, head of investments, at Munro Partners explains why, as an investment opportunity, climate change will be as big as the internet. He said there are very few companies right now with market caps above $50 billion. Part of the reason people are underestimating the opportunity is they're not ready to invest in what Griffin calls "boring" companies. 

With $50 trillion of investment needed to meet net-zero targets around the world Griffin says he is following the money to identify the beneficiaries of this trend.



Edited transcript: 

What is the next big growth opportunity in global equities?

Yeah, so when we think about climate change, we actually think of it being really, the next big S-curve that we're facing. Lots of people who would have seen us talk over the years would know we spend a lot of time talking about digitalisation. Digitalisation has effectively underwritten my funds management career over a 20 year time horizon, and as we follow digitalisation through all these different industries, effectively creating Google into Facebook, Facebook into Netflix, Netflix into software companies, software companies into AI companies.

When we look at climate, we think we're at the start of the next big S-curve. This is the big one. This will be as big as the internet, in our personal opinion, as an investment opportunity in the long run. 

And the reason why we say that is because it's just going to cost so much money. So if you look at the initiatives that have been put up by Europe, for instance, Europe has said they want to go to zero carbon by 2050. So carbon neutral by 2050. This is the thing you hear bandied around quite a lot. From that point of view, what's amazing about that is they've already costed it, they think it's going to cost them $10 trillion over the next 30 years. If you add the U.S. and China on that, you're basically talking north of $30 trillion. And I'd argue that's conservative, we've seen estimates of well over $50 trillion.

And so our job, as your growth investor, is to follow that money and try and find those next big winners. Where's that money going to be spent and how is that going to create big winners. And obviously, we've seen that in the last 12 months with a company like Tesla in electric vehicles, but I think that completely underestimates the opportunity here. We're going to say the same thing happened in renewable energy, whether it's with turbine manufacturers like Vestas or with renewable utilities like Nextera or Oersted, who are building these renewable energy fleets. You'll see the same thing happen in electric semiconductors, like Infineon or with the battery makers like Samsung SDI.

And I think the most interesting area for us is actually the energy efficiency area. It's the biggest area where there's focus, and from that point of view, you really are looking at, in many cases, what we would previously think of as boring companies like air conditioning companies or heating ventilation and cooling. If you think about BHP going to zero carbon, every headquarter has to emit no energy, every building has to be a zero-energy building. And to do that, you're looking at a refurbishment across heating, ventilation and cooling, you're looking at insulation, you're looking at pipes insulation, et cetera. And so these are all really what a lot of people think are quite boring companies that have this huge tailwind of growth behind them, and in many cases are very, very small.

The last thing I'd say on this topic is when you think about the amount of monies that are being spent here, in our area of interest, that is the companies that we're looking at here, we really struggle to find companies with market caps above $50 billion. Most of them are really quite small companies, and so we've already seen one Tesla created out of the climate boom. We suspect there's many more to come.

Want to learn more?

Munro focuses on identifying and investing in companies that have the potential to grow at a faster rate and on a more sustainable basis than the peer group. To find out more, visit the Munro Global Growth Fund Profile or their website

Stay tuned for next week where Nick Griffin reveals one window of opportunity for growth stocks right now.


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