MARKET UPDATE – DNB RENEWABLE ENERGY

This was clearly positive for portfolios with value tilt and in general in cyclical sectors. Names that was weakest over the summer typically recovered most in September. This year’s worst stock, Renewable Energy Group, was the top performer this last month following talks about positive biofuels regulation in the US. Margins have recovered somewhat, and we are also encouraged to see increasingly more cities, states and countries adopt Low Carbon Fuel Standard programs, this month exemplified by initiatives from Colorado.

We initiated in two names this month, battery separator supplier W-Scope and Benchmark which is an efficiency supplier to the aquaculture industry. We have not been so active in the battery sectors as we prefer to play it indirectly. However, we think W-Scope is well positioned towards the high growth European EV market, the industry has high entry barriers and is critical to for EV safety.

Benchmark brings together innovative products in genetics, animal health and advanced nutrition which improves the efficiency and sustainability of the aquaculture industry through improved yield, quality and disease prevention. This further improves the carbon footprint of the aquaculture industry which already is the animal protein source with the lowest carbon footprint.