Sunday, 1 March 2015
Last updated 1 day ago
Jul 28 2006 | 4:50pm ET
By Kate McGregor
Whenever the discussion of alternative energy comes up, inevitably, so does the name Robert Wilder. Wilder, founder and ceo of Wildershares, is the mastermind behind two clean energy indices, the WilderHill Clean Energy Index (ECO) and the WilderHill New Energy Global Innovation Index (NEX). But Wilder has some good news and some bad news for hedge fund managers eager to take advantage of the sector's growth.
The bad news is that it is unlikely that Wilder will attach his name to a hedge fund any time soon. The recent spike in interest among hedge fund managers and the investment community in general is making Wilder, who has a Ph.D. in environmental policy, a little anxious. "It's a bit of a caution flag that so many hedge funds want to move into the area," he said via phone (Wilder was speaking from a cabin in Southern California that is being updated with additional wiring to harness solar energy).
"Hedge funds are nimble and exciting and reflect the very recent interest in clean energy, which is all good. But part of me fears the passion of the crowd."
Wilder maintains that it is essential for him to remain neutral, particularly as new sub-sectors, such as renewable energy, crop up.
"My function as an index provider and as an academic is to be very objective about the sector. And this sector can drop like a rock," he said.
On a positive note, Wilder is in the process of creating new indices with his partner in the NEX, London-based New Energy Finance. The indices will be specific to select geographic regions, specifically in Asia and Europe. Wilder notes that most of the activity in clean energy is happening outside of the U.S. "We want to capture that," he said.
When NEX launched in January, the pool of publicly traded stocks available to choose from numbered a couple hundred (NEX tracks 86 stocks that operate in nine sectors, among them power storage, renewable energy, hydrogen and fuel cells. It is up 14% since inception and had a market capitalization of $248 billion as of July 27).
Bozkurt Aydinoglu, founder and director of New Energy Finance, speculates that the number has increased dramatically. "Since the time we launched the index, stocks have proliferated, and with interest increasing, there should be many more public stocks," Aydinoglu said. "Given this, there should be an opportunity to construct many geographical indices. In next few months, it is quite reasonable to expect different indices dedicated to Europe and Asia."
Not Only An Index, But A Way Of Life
For Wilder, investing in a clean energy is not simply a smart financial strategy; it is also a way of life. Wilder, who describes himself as a goofy environmental policy academic, lives with his wife and two children outside of San Diego, Calif., in a home run entirely on solar energy. He is also in the process of converting a Mini-Mach 1, Australia's version of the British Mini Cooper, into a hybrid that runs on solar energy and ethanol.
"Minis are very light; lightness very important to me," he said. "The whole car seats four people and weighs 1500 pounds." While all this might sound a little off-the-grid for the average American, Wilder, whose family was just featured on Animal Planet, maintains that he embodies the all-American dream: He is married with two children and lives in a home with a swimming pool (albeit solar-powered), a garden (albeit organic) and a big-screen television. "None of us are freezing to death in the dark," he said with a laugh.
Wilder also emphasizes that this is not political. "It's not liberal, left-wing, not republican right wing," he said.
While finishing his Ph.D. in the early 1990s, he discovered areas of clean energy that made sense, so he cashed in his pension and began buying stock in companies that made "green sense." When he realized that it is "very difficult to second guess the market," he hatched the ECO index in 2004, which was based on Josh Landess' Hydrogen Fuel Cell Index.
Landess helped co-create the ECO index. That index, which consists of 40 domestically listed stocks, became the PowerShares Wilderhill Clean Energy ETF in March 2005. There is an exchange traded fund in the works based on the NEX, and Wilder and Aydinoglu said they receive calls daily from parties interested in creating products based on the index.
Jan 23 2015 | 1:00pm ET
In our new section, FINtech Focus, we will profile one of these firms each week. While fintech is a broad category, we will be focusing on firms that specifically cater to the alternative investment industry. Read more…