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We have decided to split this group between the companies involved directly in the energy transition, and those working on carbon and other pollutant reduction in food and other consumer products.
There is no widely used benchmark for this group: the S&P Kensho Hydrogen Economy Index (over 88% weighting to US companies, ticker KHEUP) fell 14.5% in the year to end September, almost all of which was in Q2- in Q3 it dropped about 1%.
However overall sentiment was poor. Chinese domination of lithium battery and solar panel production has created problems for major companies in the sector which inevitably damage sentiment- even though logically lower prices should improve use cases. The major energy companies seem to be rowing back on commitments to new energy. On the other hand, governments continue to increase support but this is a slow burn and the messages are mixed by actions such as US and EU tariffs on EVs.
We continue to follow the AIM listed investment company HydrogenOne (HGEN) which invests in a range of hydrogen technologies. The company had a poor quarter- not as far as its portfolio was concerned, but in the market- it had reached a 60% discount to NAV in March, was trading at under a 50% discount in the middle of the year and ended the third quarter at about a 70% discount. Hydrogen projects have been slow to move, and the auto industry seems to be firmly now focussed on electric vehicle technology, whereas hydrogen power (whether via ammonia or through electrolysers generating electricity) seems to be increasingly being developed for heavy power use-cases (marine engines, mining, construction site generators)- the fuel cell company AFC which has some interesting ammonia cracking technology moved towards a potential spin-off of this part of its business.
We still have to see how the new UK administration’s commitment to green growth and the establishment of Great British Energy will play out: whether it will be purely an infrastructure and generation enabler and sponsor or whether it will have an impact further down the value chain remains unclear. Certainly, without either government sponsorship or large company partnerships, it will be hard for small tech companies to get to market. Large OEMs tend to want to run prolonged trials to ensure that new technologies continue to work over time, and not just “out of the box”, and large buyers will continue to play safe.
We shall be writing shortly on some other opportunities in the energy sector.
This group includes companies looking to improve the carbon footprint of the agricultural and food production industries through efficiencies and new technologies. There are a mix of issues facing companies here, from regulatory delays (e.g new crop protection treatments), to financial matters facing potential customers. Persuading customers to change the components they use in order to improve energy efficiency is often desirable but not necessarily affordable. Nonetheless in all cases the route to market is clear. Regulation has continued to tighten- for example last year the EU barred any further derogations on the use of neo-nicotinoids to protect beet, due to the effect on bees, and it seems likely that the UK will follow.
The investment company Agronomics, which has a portfolio of early stage cell-cultured food production companies, is trading on a c. 70% discount to NAV: we have recently seen its founder increase his stake. In the quarter it had reported uplifts in one of its company and non-dilutive external funding for another.
Biome was forced to make a dilutive equity issue after business from one of its US customers dried up due to problems at the customer, a warning against business concentration.
Eden, which is benefitting from the drive towards cutting microplastics and towards greener pesticides and fungicides continued to garner new regulatory permissions, including in Spain and Germany, and at the latest results the company suggested it had sufficient cash to reach breakeven.
LGB & Co. Limited
Tintagel House, 92 Albert Embankment
London
SE1 7TY
Relationship Manager
Ellana joined LGB in March 2024 as a Relationship Manager for our investing clients. Prior to LGB, Ellana worked at Bellecapital, handling client relationships and supporting the portfolio management team. Ellana graduated with a First-Class in Mathematics from Cardiff University and has a Level 4 Investment Advice Diploma.
Adviser
Simon became an Advisor to the Board of LGB & Co. with a focus on business strategy and initiatives in March 2024. Simon has extensive experience debt capital markets and wealth management. He previously ran the client and then the investment business of Heartwood and became Chief Executive in 2008. He led its well-regarded acquisition by Handelsbanken in 2013. Simon subsequently became NED and Chair of AIM-listed WH Ireland Group PLC. He was also asked to represent the wealth management sector on the FCA Smaller Business Practitioner Panel from 2013-2016.
Finance Manager
Following a degree reading Chemistry at The Queen’s College, Oxford, Antonia trained to become a chartered accountant at a London-based audit firm. She then moved into the tax sector joining EY and completing the chartered tax adviser qualification. She then gained further experience working as a finance director within industry at a family office / hedge fund.
Founder and Chairman
Andrew founded LGB & Co. in 2005 and is the Chairman of the company. He has a particular focus on the development of strategic relationships with corporate clients and business partners. Prior to founding LGB & Co., Andrew was a Managing Director at Citigroup Global Markets, where he was responsible for its fixed-income business with private banks and retail institutions. Earlier in his career Andrew worked at Schroders in London and Tokyo. Andrew graduated from Oxford University with a degree in Modern History. He is a chartered member of the Chartered Institute for Securities & Investment.
Capital Markets Director
Fergus advises corporate clients looking to raise debt and equity capital. He is also responsible for the execution and ongoing management of LGB’s MTN Programmes. Fergus joined LGB in 2019 having started his career at Lloyds Banking Group on the graduate training programme, before moving to the Leveraged Finance division, where he focused on transactions with mid-market corporates and PE firms. Fergus holds an MSc in Petroleum Geology from the University of Aberdeen.
Adviser
Lisa has worked with LGB since 2015 in supporting the on-going cultural and organisational development of the firm, providing advice on strategic people matters. Since 2006, Lisa has been running her own consultancy and executive coaching business, People Possibilities Ltd. Her work is focused on supporting clients at an organisational, team and individual level to enable high performance,improve leadership capability and effect cultural and behavioural change. Previously Lisa has held senior HR leadership positions with Schroders, ABN AMRO and HSBC. Lisa graduated from the University of Birmingham with an honours degree in International Relations & French. She is a Fellow of the Chartered Institute of Personnel and Development (CIPD) and a qualified Executive Coach.
Adviser
Charles has played an important role in developing LGB & Co.’s investment approach by encouraging a focus on investing in businesses with strong IP or know-how with recurring revenue business models that can prosper throughout economic cycles. Charles brings over 30 years’ experience of investing in privately-owned and publicly-listed small and mid-market companies. He is a director of Larpent Newton & Co. and Hygea VCT plc. Charles qualified as a Chartered Accountant at Peat Marwick, now part of KPMG.
Programme size: £25m
Establishment Date: XX 2017
Number of issues: 20
Sector: Financial services
Focus: Loans and leasing
Programme size: £20m
Establishment Date: December 2017
Number of issues: 12
Sector: Marine tracking
Focus: Maritime surveillance and management
Associate
Ben joined LGB in October 2022 as an associate after spending three years as a credit analyst at 9fin, where he produced research on corporates in the European & US High Yield and distressed debt markets.Ben holds an MSc in Investment Management from Bayes Business School (formerly Cass) and is a CFA charter holder.
CEO
Cedric was appointed CEO in July 2022 after a period of 18 months as a COO. Cedric spent 15 years working on the energy and commodities sales and trading desks for global banks (BNP Paribas, BAML and MUFG). He gained extensive international exposure, being based in London and Singapore and covering transactions in all geographic regions. Cedric graduated from Global Executive MBA at INSEAD in 2018 and started working in the capital markets space for growth-stage companies. He is also a director of LGB.
Relationship Manager
Megan joined LGB in January 2021 as a Relationship Manager. She is responsible for all day-to-day transactions with investment clients and oversees the LGB Investments Platform and Deal Hub. Prior to LGB, Megan worked at Puma Investments, a tax-efficient investment provider, in the sales and investor services team. Megan graduated from the University of Bath with a Bachelor of Science degree in Psychology. Megan obtained the CISI Level 4 Diploma in Investment Advice in October 2021.
Investment Director
Ivan is LGB’s Investment Director: he is responsible for developing LGB’s investment proposition in the context of the broader market and economic developments. He regularly meets individual company management teams to seek out and monitor investment opportunities. Ivan has served as a senior adviser to the Equity Division of Société Générale, and was previously Managing Director in charge of equity sales for them in London. Earlier in his career, Ivan worked at Morgan Stanley, Lazards and Schroders. He has degrees in history from Cambridge University & London University, and an MBA from Cass Business School.
Managing Director
Simone is responsible for LGB & Co.’s business with investing clients, who include institutional investors, wealth managers and sophisticated private investors. Simone’s team provides access to a range of compelling investment opportunities with a particular emphasis on proprietary medium term note and equity transactions. Simone manages the portfolios of clients who have entered into advisory or discretionary investment agreements with LGB Investments, and advises the fund managers of the Guernsey-based LGB SME Fund. Prior to joining LGB & Co., Simone worked in the institutional fixed income department of Citigroup Global Markets. She began her career at Citigroup Private Bank in Geneva. Simone graduated from the University of Lausanne with a degree in HEC, Business Administration. She is a Chartered Member of the Chartered Institute for Securities & Investments.