Britain’s record of nurturing climate change assets is not good. 

The most damaging recent example was when Theresa May’s government sold off the state-backed Green Investment Bank to the ‘Vampire Kangaroo’ Macquarie in 2017, for £2.3billion.

It was an important backer of innovative green technologies and offshore wind power, thanks to government guarantees.

Leader: SSE has embraced the climate change agenda by investing heavily to meet the UK target of 25% of power coming from offshore wind by 2040

Leader: SSE embraces climate change by heavily investing in the UK to achieve the target of 25% power from offshore wind by 2040

Its successor organisation, the Government’s Leeds-based UK Infrastructure Bank, headed by former British Land chief executive Chris Grigg, is now seeking to put Humpty Dumpty back together again.

It seems that Elliott Management’s aggressive attack on SSE, the power utility, is not well-informed. 

SSE is embracing climate change and has invested heavily in order to achieve the UK goal of 25% of offshore wind energy by 2040.

Through cross-subsidisation, it is capable of financing investment in cleaner energy. This approach is different from that of BP in the UK, where it uses fossil fuel proceeds to finance a transformation to clean energy.

Elliott argues that, as a power conglomerate, SSE’s existing and future investment in offshore wind and other technologies does not get the valuation it would deserve as a separate company. 

It would be more appealing as a standalone investment and therefore eligible to include in ESG-compliant, fashionable green funds.

Elliott overlooks the fact that, after a separation, the green side would cease to exist. Its cashflow, which has accelerated its growth, would be reduced and its future ownership uncertain. 

The private equity investors would probably grab the opportunity to buy it. They are more focused on short-term gains than long-term climate change mitigation.

Britain needs what the Aussie thinker Roman Krznaric calls the ‘good ancestor’ – investment in future generations. Elliott’s laser-focused focus on financial returns is exactly the opposite.

This doesn’t mean that all the ideas in its ten-page combative missive to SSE are without merit. This suggestion to SSE that it strengthens its board by appointing two climate-change experts as independent directors is sensible. 

It is better for SSE to make that voluntary move than to be under siege at its annual conference, like Exxon did in the US.

Elliott has also targeted Alistair Phillips Davies, chief executive of SSE, suggesting that he might be ready to leave after eight years. Perhaps that is what will happen.

However, the main priority should now be to stop the buccaneers.

Hiring growth

The FTSE 100’s lack of pizzazz is a perennial complaint. It also underperforms other indexes.

Ashtead is an equipment rental firm that was founded in Surrey, England in 1947. Today it earns a lot of income in the USA from Sunbelt Rentals.

The latest results indicate that America rebounded from Covid in the first half and there was a surge in revenue and profit. Construction and farming gear also saw a rise in demand. 

Investors again were pleased when the company raised its revenue forecast for full-year from 13-16% to 17-20% 

Share performance has been remarkable, the price almost tripling over the last 12 months, sending its market capitalisation up to £29billion, making it the best performing blue-chip stock.

In the past decade, shares have increased by 4,000%, which is the same kind of explosive growth that Silicon Valley titans would expect.

The performance of Ashtead makes one wonder what might have been for UK generators-for-hire specialist Aggreko, which slipped into private equity ownership this year – bought by TDR for £2.3billion.

A second case in which UK plc was sold quickly.

The Lion roars

UK fund managers strive to provide all-inclusive services for all their clients.

Last week, Abrdn made a major step in retail by purchasing Interactive Investor.

Liontrust began as a retail company and is now expanding its reach to institutional investors. It has snapped up stock-pickers Majedie Investments, boosting funds under management by £5.8billion to £42.3billion.

It follows the purchase of Robin Geffen’s Neptune Investment Trust in 2019.

Boutique managers were once proud of their independence.

Post-Woodford: Size and good governance have become more important.

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