Mariana Castelo Branco
- The stock market has been boosted by a surge in tech shares this year, thanks to investor excitement over AI.
- But two fund managers see a massive investment opportunity outside the technology craze: the clean energy sector.
- Global energy transition will need "comfortably $100 trillion" in capital over the next thirty years, says Mark Lacy of Schroders.
The global transition toward clean energy will create investment opportunities worth at least $100 trillion over the coming three decades, according to two fund managers at Schroders.
While investor excitement this year has mostly centered around the capabilities of artificial intelligence and technology, Mark Lacy and David Boyce see enormous potential in the clean energy sector.
Speaking on The Investor Download podcast, Lacy said that there is "comfortably over $2 trillion per annum" feeding into the energy transition market.
"That's outside of the traditional oil and gas market, and that's a cumulative comfortably of $100 trillion over the 2020 to 2050 period," he said.
"Never has the energy market from a public perspective or a private perspective ever seen this much capital that's needed going into it in a 30 year period. So it's going to be transformational from an infrastructure perspective, but also from an investment perspective."
The two Schroders fund managers aren't the only ones taking note of the uptick in green energy investment.
Last month, the International Energy Association reported that the amount of capital investment flowing into the solar sector is set to overtake the amount in oil production for the first time.
According to the IEA, solar investments are expected to top $1 billion a day in 2023 with over $1.7 trillion slated to flow into clean-energy technologies such as EVs, renewables and storage. Overall, global investment in energy is projected to hit about $2.8 trillion in the current year.
"For every dollar invested in fossil fuels, about 1.7 dollars are now going into clean energy," Fatih Birol, the IEA's executive director, told CNBC.
For the moment, it's tech stocks that have led the market's gains this year. Chipmaker Nvidia, electric-vehicle manufacturer Tesla, and social-media giant Meta Platforms have emerged as three of the main winners of the AI craze – each racking up triple-digit gains in the first half of 2023.