30 November 2023
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As investors face a number of challenges, notably climate change, Geneva-based asset management company Quaero Capital outlines its top stock picks.
As the United Nations Climate Change Conference starts in Dubai this week, Adrian Bignell (pictured), portfolio manager at Quaero Capital, discusses his top stock picks included in the recently-launched Quaeronaut Small and Mid-Cap fund. The fund, which comes under Article 8 of the EU’s Sustainable Financial Disclosure Regulation, invests in European small and mid-cap stocks.
As an Article 8 fund, Quaeronaut’s philosophy is to engage with the companies in the fund to drive positive change by dialogue and encouragement.
In ESG terms, Bignell believes that there are winners and losers and in the middle, there are a host of companies waking up to and embracing the new challenges. He is keen to help these companies to go as fast as they can in terms of improving their existing business and even to go as far as adapting to new business models if it makes sense. He singles out three firms in the fund that encapsulate a willingness to pioneer a more sustainable way of doing things in their respective niches.
Fugro is a Dutch seismic data collection company which, historically,, has mainly served the oil and gas sector. The oil and gas clients require an accurate knowledge of where and how to install infrastructure on land and, more importantly, on the ocean seabed. Knowing where to dig trenches, install pipes and position oil and gas production equipment needs a detailed understanding of the geo-technical data. But from 2017, the company has undergone a profound change. They have sought to pivot the business away from oil and gas and towards the offshore wind industry.
By using its vessels, engineers and data processing capability, Fugro is able to drill and analyse the ocean bed core samples that allow it to advise where to position the monopiles that hold the wind turbines in place on the sea floor. And every single wind turbine requires its own individual core sample to ensure it doesn’t end up being positioned in a weak structure or on a hard boulder. With some windfarms holding more than 200 individual turbines, there is a lot of work for Fugro. As a result, Fugro now has over 30 per cent of group sales coming from renewables. The business is better balanced and well positioned to benefit from the growth in offshore wind in the years ahead. Bignell sees good opportunities for the stock to re-rate accordingly in light of the improved business mix and strong growth outlook.