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03/2025

The Appeal of Global Impact Funds

Andres Gujan on the Attractive Investment Opportunity of Global Impact Funds

In today’s investment landscape, impact funds are becoming increasingly attractive. They offer a unique combination of financial returns and positive social and environmental effects. Through diversification, the use of expertise, a focus on growing sustainable markets, and transparency in impact reporting, these funds present a compelling investment opportunity. Investors looking to achieve their financial goals while making a positive contribution to the world will find global impact funds—such as Carnot Capital’s Carnot Efficient Resources Fund—a valuable and future-oriented investment choice.

The following key reasons highlight why they are a strong investment:

  • Dual Returns: Impact funds aim for both financial gains and measurable positive effects on society and the environment, allowing investors to align their capital with their values.
  • Diversification and Risk Mitigation: These funds invest globally across various sectors and regions, spreading risk and increasing portfolio stability.
  • Growing Demand for Sustainability: The rising global demand for sustainable solutions and increasing regulatory requirements create attractive growth opportunities for companies in which impact funds invest.
  • Professional Management: Global impact funds are often managed by experienced professionals with deep expertise in sustainable investing, enabling them to identify the best investment opportunities.
  • Transparency and Accountability: Impact funds place great importance on measuring and reporting their social and environmental impact, strengthening investor confidence and making the effects of their investments visible.

“The combination of financial returns and positive societal impact makes global impact funds a highly attractive and future-oriented investment opportunity.” Andres Gujan, Founder of Carnot Capital & Impact Portfolio Manager

Andres Gujan, February 13, 2025

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Stagnant Markets and Rising Competitive Pressure: Europe’s Car Manufacturers in Crisis

Stagnant Markets and Rising Competitive Pressure: Europe’s Car Manufacturers in Crisis

Reorganisation in the Automotive Industry:

VW reported record results in 2022 and 2023, but barely a year later the mood is one of crisis – there is talk of plant closures and redundancies. The other European manufacturers are not faring much better and are also facing capacity adjustments and restructuring. This has a lot to do with the planned switch to electromobility, which has stalled in 2024. Global EV sales rose by 22% in H1 2024, but the market in Europe is stagnating. Fiat, for example, had to reduce production of the 500e by 60% (DW.com).

A Competitive Edge

The blame for the crisis is universally attributed to poor policy: Too little support, too much support, pending ban on combustion engines, purchase premiums, CO2 limits, import tariffs, Chinese subsidies, etc. In our eyes, this perception is not wrong.

However, we believe that the main cause of the crisis is the eroding competitiveness of European car manufacturers, regardless of the type of drive. Asian competitors have become technologically equal, if you believe the (European!) test reports. In terms of production efficiency, they have an advantage anyway: at VW, employees generally work (only) 35 hours a week, but enjoy 6 weeks’ holiday and are sick for more than 5 weeks on average. So it’s easy to understand why, for example, VW employees work more than 5 weeks a week.

Unattractive OEMs, Waiting for Entry Opportunities

The transport sector is responsible for around a third of global energy consumption and is therefore an important fund theme. Nevertheless, we have kept our exposure to the automotive sector below the target level for years (currently approx. 12%). Automobile manufacturers (OEMs) and suppliers such as Continental are unattractive due to their high capital intensity. We are looking for opportunities primarily in the electrification of road and commercial vehicles (Lem, Infineon, Melexis, X-Fab, Sandvik). The electric drive plays an important role here, and new safety and comfort components are also increasing the demand for silicon. However, we are still holding off on acquisitions.

Rolf Helbling / Andres Gujan, 5. November 2024

 

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Interview with Matthias Kubli – Portfolio manager and part of the management team

Interview with Matthias Kubli – Portfolio manager and part of the management team

Dear Matthias, what motivated you personally to become part of Carnot Capital – and what excites you about our focus on energy and resource efficiency?

I have known Carnot Capital for many years – I was part of the team from 2013 to 2015. The contact has never been broken off, and since 2021 I have also been privately involved as an investor in the Carnot Efficient Energy fund.
I am convinced by Carnot Capital’s clear guiding principle: technologies must make both economic and ecological sense. This interplay is central to me. At the same time, I am motivated by the goal of outperforming the market and achieving a measurable positive impact.

What specific experience from your career path do you bring to the table that is particularly valuable for our portfolios?
My investment universe has overlapped considerably with that of Carnot Capital in recent years – we have regularly exchanged views on companies and market trends. My in-depth understanding of industrial and technology companies is a clear value add. I also have the skill critically analyse new technologies and realistically assess their market potential – an essential skill in an environment that is focused on efficiency.

Was there a key moment that particularly shaped your interest in sustainable investments?

Throughout my travels to various regions of the world I have seen how differently resources are used. In Switzerland, we are already well positioned in terms of energy efficiency – globally, the situation is often quite different.
For sustainability to have a global impact, solutions must be affordable and scalable. Overly expensive technologies or purely theoretical approaches do not help. This pragmatic approach fits in very well with Carnot Capital’s philosophy.

Where do you see the greatest opportunities for Carnot Capital in the coming years – both at a portfolio and company level?

Carnot Capital has loyal clients and a strong position in the market for impact investments. Its long-standing specialisation in energy and resource efficiency is a competitive advantage that enables it to identify new trends at an early stage.
Many companies in our investing universe have experienced challenging phases in recent years. However, I am currently seeing a trend reversal in several sectors. This new phase of reorientation is an opportunity to make targeted investments in companies that are on the verge of a sustainable growth spurt – and thus generate additional returns for our investors.

How do you see the role of listed companies in the transformation towards an energy- and resource-efficient economy?
We are at a turning point: the time for declarations of intent is over – reality is catching up with us. Shortages, extreme weather, pollutants in food – all this shows how urgent change is. Listed companies play a central role: with their innovative power and financial strength, they can scale solutions and achieve real impact. For many, this transformation offers not only a responsibility, but also an enormous opportunity for growth.

What values are particularly important to you in management and collaboration – and how would you like to bring these to Carnot Capital?
In a small team like Carnot Capital, entrepreneurial thinking and pragmatic action are crucial. For me, a common goal is the central anchor. I attach great importance to discussing ideas openly – at all levels. If everyone can actively contribute, the company remains dynamic and continues to develop. This is precisely the kind of forward movement that I want to help shape at Carnot Capital.

Many thanks dear Matthias – we look forward to a sustainable future with you.

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