Power play: Ovo Energy's 10-year journey from tiny to titan
When Eversmart Energy went bust earlier this month, leaving thousands without a supplier, it was reportedly the sixth UK power company to get snuffed out so far this year—with more businesses in the sector predicted to fail in the coming months.We used to post on Generation Investment Management at least once per quarter when the 13 - F came out, in part because it is run by ex-Goldmanite David Blood and we could riff on the Blood & Gore thing.
The UK energy market is a mess. First, the country's energy suppliers operate in a competitive landscape, which already puts pressure on pricing. Add to that increasing wholesale prices and tougher regulations on tariffs, and many are struggling to keep the lights on. But somehow, Ovo Energy has turned this chaos into a ladder.
The 10-year-old energy supplier has agreed to buy rival SSE Energy Services' UK household energy unit for £500 million (around $623.8 million), which will reportedly make Ovo the country's second-largest energy supplier behind British Gas in terms of customers served. The deal, which comprises £400 million in cash and £100 million in loan notes, has more than doubled Ovo's footprint. Prior to the deal, Ovo had 1.5 million customers. Now the combined entity of some 10,000 employees will serve nearly 5 million households in the UK.
Even before the transaction, the company—launched by CEO Stephen Fitzpatrick to offer affordable and clean energy— witnessed impressive growth. Ovo has increased its UK customer base by 50% in the past year, partly thanks to a recent cull of competitors. At the same time, it opened operations in France and Spain, with plans to expand to Australia, Germany and Italy in 2020. And in February, Ovo was said to have achieved unicorn status, when Japanese multinational Mitsubishi picked up a 20% stake for a reported £216 million.
The company's other investors include the UK Government, which gave the company a grant in 2018, Mayfair Equity Partners with an investment in 2015, and former US Vice President Al Gore's Generation Investment Management, which reportedly backed Ovo in 2014....MORE
We stopped because the fund is not particularly "green", no wind or solar or more importantly for idea- generation, no tiny tech breakthroughs.
It is ostensibly an ESG fund, because of a tech orientation. One of the largest position is Alphabet where Mr. Gore is an advisor.
And because of the tech orientation it's performed better than average during the bull market.
Here's the latest 13 -F report on the stock positions, keeping in mind this only shows U.S. traded names and no derivatives - which can change exposure from long to flat (or short in George Soros' case, he was a tricky bugger on the reporting back in the day)
The names are in the infotable.
