Oil hedge fund manager Pierre Andurand has hired one of the most high-profile environmental analysts in the City of London ahead of the launch of a new environmentally focused fund, in the latest sign the energy transition is driving change across every part of the oil industry.
Mark Lewis, who has helped pioneer financial institutions’ interest in green finance and investments during a 20-year career at banks and think-tanks, is set to join Andurand Capital Management this month after leaving BNP Paribas at the end of May, where he was chief sustainability strategist since 2019.
Interest in trading carbon and other green investments has exploded over the past 18 months as governments have stepped up commitments to tackle climate change, including cutting emissions to “net zero” in the coming decades.
Andurand became one of the world’s best known energy traders by calling the majority of the big swings in oil markets over the past two decades, including returning investors as much as 152 per cent last year after betting heavily on crude’s pandemic-linked crash.
His two existing funds — with differing risk profiles — have also started 2021 with strong gains from oil’s recovery and a rally in carbon prices, gaining between 27 per cent and 32 per cent by the end of May, according to people familiar with their performance.
But while his career has been steeped in trading oil, Andurand has spoken about the world’s need to move away from fossil fuels and cut emissions. He started trading EU carbon allowances last summer, shortly before prices started to soar, reaching more than double their pre-pandemic level this spring.
The trader, who started his career at Goldman Sachs and commodity house Vitol, said hiring Lewis was part of a plan to launch the Andurand Climate and Energy Transition fund this summer.
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Andurand said Lewis would “help oversee the launch and growth of our new fund”, adding that the analyst would help identify “the vast investment opportunities to be created in the world’s upcoming transition away from fossil fuels”.
“I am optimistic about the investment opportunities to be found, and also, of our small contribution to progress the vital energy transition . . . to get the world to net zero, as soon as possible.”
Lewis, who has also worked for Barclays, Deutsche Bank and Carbon Tracker, said he was joining the fund partly because he believed that alongside long-term investments in the energy transition, the shift would create additional volatility in assets such as oil, carbon and other commodities.
“The energy transition is the biggest investment story of the next three decades,” Lewis told the Financial Times.
“But while the direction of travel is clear there will inevitably be steep hills and sharp drops in the road in places,” he said, adding that he believed a hedge fund was “a more flexible and agile vehicle to negotiate the inevitable bumps and potholes in the road”.
Lewis has argued that EU carbon allowance prices will need to rise sharply if alternative fuels such as hydrogen produced from renewable electricity are to become competitive, which he believes is a prerequisite for governments reaching net zero targets.