Wednesday, September 26, 2007

Investors Reap Returns on Clean Energy

I have not seen the report and don't know the methodology.
The 55% annualized return caught my eye because I had used that figure (during a mis-spent youth) to calculate whether I would live long enough to own the world.

It works out to an 80-fold increase per decade. All I had to do was maintain the rate, have an eighty year working life, never have a down year and et voila $1,600 Trillions. For a buck.

A few years later,
I knew quite a bit about reversion-to-the-mean.

Some day I'll quote the old traders,
"Don't mistake a bull market for brains".
Sing with me kids: Alpha; Beta; Gamma...

Here's the story from Red Herring with a hat tip to AltEnergyStocks:

Venture backers of European clean energy startups reaped a 55 percent annualized return on their investments from 1998 to 2007, the London-based research group New Energy Finance said Tuesday.

The analysis, which was commissioned by the European Energy Venture Fair to take place this weekend in Zurich, looked at returns earned by 37 venture capital and private equity investors in 129 early stage companies dealing in low-carbon technologies such as renewable energy, fuel cells, power storage since 1998.

Of the 129 Europe-based portfolio companies that participated in the overall analysis, 15 IPO’d and 10 were sold to trade buyers, the research group said. Twenty-one companies raised more money with subsequent funding rounds.

At the same time, nearly an equal number of companies, 19, had been “written down” or raised smaller, subsequent funding rounds.

Over the same 10-year period, the 37 investors plowed €283.6 million ($396.1 million) into the portfolio companies and earned exit returns of 1.4-times funds invested. For non-exit companies, returns were 1.2-times total funds invested, according to New Energy Finance.