Green Predictions for 2011

Posted by Matthew Leibowitz

Earlier this week I was a speaker at the Toronto Greenhouse event entitled Green Predictions – 2011. I was asked to formulate three predictions for the upcoming year. Naturally I focused on what investors are thinking about.

I prefaced my predictions with the disclaimer that predictions don’t always come true. So don’t hold my feet to the fire! Nevertheless, here it goes....

Prediction one: Investors will shy away from investing in Ontario FIT dependent companies. At the moment there appears to be too many variables in regards to pricing and pending elections/political landscape. Investors like to see future cash flow models and the aforementioned variables pose risk. However, that is not to say there isn’t a market for investing in FIT dependent companies – large investors (pension funds/infrastructure investors) that have experience in renewable energy infrastructure projects will lead the way.

Prediction two: Smart-grid IT management companies will be a hot topic for Cleantech investors. These companies have relatively low barriers to entry and low cap-ex costs. They are an IT add on integration/management system for the existing grid. Very cool....

Prediction three: There will be more M&A/IPO activity in the Cleantech space. Four of the five largest VC investments last year were in Cleantech companies. These included A Better Place which received $350mm, solar thermal company BrightSource Energy at $150mm, Abound Solar raised $110mm and smart grid networking firm Trilliant received $105mm (see prediction two). The investors in these (and other) other Cleantech companies will be itching to see liquidity events. If any one of Facebook, Groupon and/or LivingSocial goes public this year, it may set off a new wave of tech liquidity events which will have a positive impact on the Cleantech sector.

With these new large cash injections, let’s be hopeful that 2011 will be the best year yet for growth of Cleantech companies.

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Matthew Leibowitz

Matthew Leibowitz

Matthew has been involved in developing and reviewing investment opportunities for BEST Funds as well as assessing new business activities for the firm. Matthew is largely focused on origination, vetting, due diligence, negotiation and deal structuring for the investment of acquisition deals. He also is involved in the firm’s mergers and acquisitions process, as well as the assessment of... more



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