Could the three-year slump in cleantech stocks be ending?
It’s been a tough few years since the glory days of cleantech stocks came to an end – in the good ‘ole days of 2005-2007, companies piled onto the world’s public markets and were among the top performing stocks.
Since then, share prices have crashed and there have been few IPOs.
Goldman Sachs, the lead arranger for clean energy IPOs in 2012 with just three deals valued at $405.6 million, thinks the tide may be turning.
"It feels like the worst is behind us," Stuart Bernstein, the Goldman partner who oversees renewables, told Bloomberg. "I’m a contrarian, so when everyone else is capitulating, I think it’s time to invest."
Last year, Goldman underwrote the IPOs for Tesla Motors (Nasdaq: TSLA), SolarCity (Nasdaq:SCTY) and biofuels company Ceres (Nasdaq: CERE).
It has an equity stake in BrightSource Energy, which cancelled its IPO last year.
The $375 million China Longyuan Power Group (HKG:0916) IPO was the biggest for 2012, arranged by Morgan Stanley and UBS.
Goldman Sachs plans to arrange financing for a panoply of cleantech projects over the next decade, to the tune of $4 billion a year. Calling it one of the greatest opportunities for profits, they’re looking at renewable energy, energy efficiency and storage, lighting, transmission, green materials and transportation.
A global shift toward cleantech is inevitable, says Bernstein, and "short-term volatility will be trumped by long-term gains as emerging technologies first become commonplace and then become indispensable," he told Bloomberg.
As the appetite for risk has returned to the market, shares in renewable energy stocks have begun to come back, up 20% in the past couple of months. Indeed, the cycle for riskier, younger companies typically is in favor during latter stages of bull markets.
Tesla’s shares have more than doubled since its IPO, and SolarCity shares are up 77%.
Three years ago, Goldman created a separate unit to invest in cleantech as "a promising long-term play," he said. Don’t forget, he says, in the 1990s, the tech industry was seen as extremely risky, but now it’s the backbone of the information age.
"We have a growing global population coupled with an increasing per capita consumption of energy, while fossil resources are finite and shrinking," he told Bloomberg. Backing renewable energy isn’t just an investment strategy, it’s a necessity."
Here are the top cleantech deal makers for 2012, according to Bloomberg New Energy Finance:
Asset Finance
Top Lead Arranger – European Investment Bank (Luxembourg)
Top Syndicated Lender – Mitsubishi UFJ Financial (Japan)
Top Sponsor – Energie Baden-Wuerttemberg (German)
Legal Advisor – Linklaters (UK)
Mergers & Acquisitions
Top Acquirer – Toray Industries (Japan)
Venture Capital & Private Equity
Top Investor By Total $M Deal Credit – HEAG (Germany)
Top Investor By Number of Disclosed Invesments – Emerald Technology Ventures (Switzerland)
Acquisition Advisors
Top M&A / VCPE Financial Advisor – BTG Pactual (Brazil)
Top M&A / VCPE Legal Advisor – Machado Meyer (Brazil)
Public Markets
Top Public Markets Lead Manager – Goldman Sachs (US)
Top Public Markets Co-lead Manager – Bank of Nova Scotia (Canada)
Top Public Markets Legal Advisor – Davis Polk & Wardell (US)
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