Stockholm (HedgeNordic) – Around the midpoint of the year, Atlant Precious changed its name into Atlant Green Tech Metals and shifted its focus from precious metals to “green” metals to capitalize on the green energy transition. After booking a loss of 6.4 percent for the third quarter ending September, Atlant Green Tech Metals advanced 10.1 percent in October to bring its year-to-date performance back into positive territory.
“The portfolio transition has begun to have an impact and, above all, it is the lithium and energy metals sector that is gaining the most activity right now after a number of deals,” portfolio manager Mattias Gromark comments on the performance. One of the fund’s portfolio holdings, Neo Lithium, received a bid of CAD 6.5 per share in cash from Chinese Zijin Mining, which values the company at around CAD 960 million. “The stock rose 38 percent during the month and started to rise even before the bid,” says Gromark. “The acquisition is Zijins Mining’s first acquisition in the battery materials sector but certainly not the last.” The fund’s largest holding with a 6.9 percent portfolio weight, Lithium Americas, is engaged in a bidding contest with Chinese battery maker Contemporary Amperex Technology (CATL) for Canada’s Millennial Lithium Corp.
“The portfolio transition has begun to have an impact and, above all, it is the lithium and energy metals sector that is gaining the most activity right now after a number of deals.”
The strong performance of Atlant Green Tech Metals also helped Atlant Fonder’s fund of funds, Atlant Multi-Strategy, reach a new all-time high. Atlant Multi-Strategy is now up 5.2 percent in the first eight months of 2021 and remains on track to reach its sixth consecutive year of positive annual performance.
“The market has finally opened its eyes to the companies that have the raw materials needed for the world’s accelerating energy transition.”
The rapid and necessary transition away from fossil fuels and towards renewable sources of energy is leading to significant demand for minerals such as lithium, cobalt, nickel and copper that are needed for renewable energy technologies. Atlant Green Tech Metals seeks to facilitate the green energy transition and take advantage of the opportunities created by the transition. “The market has finally opened its eyes to the companies that have the raw materials needed for the world’s accelerating energy transition,” emphasizes Gromark. This comes as delegations have convened in Glasgow for the UN COP26 Climate Change Conference to find ways to reduce greenhouse gas emissions.
COP26
“All eyes are now on Glasgow and COP26, the UN’s 26th climate summit, which runs from 31 October to 12 November,” says Gromark. “In 2015, the now historic Paris Agreement was concluded, agreeing to keep global warming well below 2 degrees Celsius compared to pre-industrial levels while pursuing measures that limit warming to 1.5 degrees,” he continues. “The Paris agreement is binding but does not define how each country will achieve the objectives. So now you have to chisel out what is to be done and a lot of work remains to be done.”
“All eyes are now on Glasgow and COP26, the UN’s 26th climate summit, which runs from 31 October to 12 November.”
“Unfortunately, it looks difficult to pick up the pace when China is not prepared to increase its level of ambition, they want to continue increasing emissions until 2030!,” points out Gromark. A key discussion point is the creation of a global emissions trading system, according to the fund manager. “The EU plans to introduce the Carbon Border Adjustment Mechanism within a couple of years, with the aim of putting a price on the environmental footprint of products and to level competition so that cheap dirty production does not pay off compared to sustainable production.”
