True North Institute LLP

Clean Hydrogen Investment Framework. Today, I am posting a link https://lnkd.in/eB9k255r to a copy of our in-depth research on where clean hydrogen fits in the overall global energy transition and where the investment opportunities are (and are not). This was first published in February, but we have updated it and posted a more digestible one-page summary on the True North Institute website https://lnkd.in/eyDUSeCf The bottom line is that electrification and biofuels can supply, by 2050, perhaps as much as 65% of all secondary (end use) energy needs affordably and without major subsidisation. This leaves only two major solutions for the rest – carbon capture (CCS) and clean hydrogen, both being burdened with high costs of over $100/tonne of carbon abated, with some applications of CCS and H2 costing over $400/tonne as you can see in the table below. The only two scenarios are that this massive amount of emissions goes unabated or governments step in with policy action to support clean hydrogen (and CCS). Capital will only be allocated to clean hydrogen where investors see significant and permanent government policy initiatives that either limit or tax the use of the fossil fuel alternatives or provide subsidies such as those currently in place in the US through the IRA. This is far from certain.    As you will see in our Clean Hydrogen Investment Framework, the most profitable investment opportunities will be in the lowest cost applications of clean hydrogen. We supply our 2050 forecast below for where the market will develop most if subsidies of the scale of those provided by the IRA remain in place over the long term. This 300 Mt forecast falls far short of the 600 Mt 2050 market size that the IEA and other experts forecast is required to meet net zero targets. The whitepaper points the reader to where the largest profit pools will emerge. 

https://lnkd.in/epvEkbXX

This is True North Institute’s inaugural quarterly newsletter. The primary aim is to quickly arm the Chief Investment Officer with important agenda items to be debated in any upcoming investment committee meeting.

Our most recently published whitepaper analyses the last 10 years outperformance of 12 of the largest and most highly respected US university endowments. We are not looking to show a named ranking but rather get a sense of how much alpha is being generated on average from what we presume to be some of the best constructed and populated institutional portfolios. We use non-investible multi-asset class benchmarks to arrive at 1.2% of alpha p.a. over the last 10 years. Against an investible equity equivalent beta-based benchmark, alpha rises to 2.7% p.a. which includes the illiquidity premium in the private equity, venture capital and real assets allocations. There is a lot to learn from the data incorporated which we don't think has been shared in this way before. You can download a pdf version of this from the True North website here. https://lnkd.in/ex_SXEV9

Today is a big day. I am launching yet another new business; more philanthropic than commercial. True North Institute LLP will publish research on the biggest issues facing large sophisticated investment institutions and create a CIO forum for sharing and improving upon them..... all in the interest of making investing more successful for the asset owners by backing the right asset managers. Job #1 is to continue to paint a path to the most effective investing in support of the energy transition, e.g., by backing the biggest public company decarbonisers and the right private technology investments. The Energy Transition Investment Framework v2 can be found here. https://lnkd.in/e_DGSwmD Please have a read of the press release below, then have a look at the website and let me know what you think. Love to have ideas for future big issues to wrestle to the ground.