Investment News Features Pete Bush

January 25, 2009

Originally Published on 1/25/2009 by

Despite the economic downturn, investors with more than $100,000 in assets were still optimistic about investing in green ventures, according to a survey released today by Allianz Global Investors.

While the online poll of 1,264 participants yielded results similar to one conducted in 2007 by the New York-based firm, what comes as a surprise is that interest in environmental investing hasn’t diminished, despite the recession.

“We thought that even just the topic of investing alone would get little or no interest. But the survey showed that there is an interest and belief in environmental-technology spending and investing,” said Brian Gaffney, chief executive of Allianz Global Investors Distributors LLC and Allianz Global Investors Managed Accounts.

Conducted Dec. 12-19 by GfK Roper Public Affairs & Media, a division of GfK Custom Research North America of New York, the survey found that most investors were optimistic about programs outlined by President Obama.

About 78%, said they believed that there will be more policies encouraging investment in the environment in the next year than under the Bush administration and that environmental technology could be the “next great American industry.” Also, 74% said that they expected more support from Congress for environmental policies.

Investors also may be embracing the reality of climate change. Even though gas prices have declined, 97% of the participants said that they believed that it still will be important for the United States to explore alternative fuel sources.

And nearly half, or 48%, said that it is likely that they will make an investment this year to capitalize on the environmental trend. But that is a decision that requires research, and 68% said that they needed to consult with a financial adviser about environmental investing.

Some advisers are already hearing from clients.

“We have gotten more questions than normal on green investing,” said Pete Bush, co-founder and partner at Horizon Wealth Management LLC of Baton Rouge, La., which manages $200 million in assets. As a result, the firm has beefed up its research, he said.

When clients seek a green investment, Ahouva Steinhaus, president of Asiel & Associates of San Diego, Calif., typically recommends mutual funds because they provide a broad variety of investments.

“You have a better chance of including in the portfolio some of the companies that are going to be the standouts,” said Ms. Steinhaus, whose firm manages $20 million in assets.


But not all advisers are taking the lead.

A full 85% of the investors surveyed said that advisers had made no recommendations to them about environmental investing. In a sign that advisers may be reacting to clients’ caution, two-thirds, 66%, said that environmental investments made a portfolio more volatile and 27% said that they hadn’t made green investments because it was too hard to get accurate information.

Volatility is probably more about market capitalization than the hue of the portfolio, said Steve Schueth, president of First Affirmative Financial Network LLC, a Colorado Springs, Colo.-based organization of 130 advisers specializing in socially conscious investing that manages $530 million in assets.

“Most of the investment opportunities in the green space are small companies,” Mr. Schueth said. “And for the investor, the risk is that you overload your portfolio with small-cap investments.”

And while 56% of those surveyed said that they somewhat or completely agreed that investors have to give up some return when buying green, Mr. Schueth said that comparison should be made based on asset class as well.

Allianz is launching an educational section on its adviser website and is offering a kit that will help advisers prepare educational presentations for clients about green investing.