market folly

We're posting up notes from the Capitalize For Kids 2018 investment conference.  Next up is Jeff Ubben of ValueAct Capital who pitched a long of Hawaiian Electric (HE).


Jeff Ubben's Capitalize For Kids Presentation: Long Hawaiian Electric

•    “The Utility of the Future”
•    Talking about the ValueAct Spring Fund
•    Stakeholder capitalism will be the de jeur over the next 20 years
•    Thus the spring fund, making companies more sustainable - invest more, go faster, be a leader, solve the problem (climate change, education, etc.)


•    Hawaiian Electric - Biggest and newest investment in the spring fund
•    “The resilient and growing platform that enables clean energy production and electrification of transportation to decarbonize Hawaii faster”
•    Hawaii is largely an oil burner for electricity generation. 50% of US’s oil burned for power in HE. Particularly since they have tons of renewable areas
•    Renewables are much more expensive since their diesel is particularly expensive
•    Intermittency is the issue
•    Batteries are so good that you will never need a gas peaking plant again
•    Can generate 6.5bn in savings throughout the whole state which can be passed to ratepayers, state and shareholders
o    Study has aggressive assumptions w.r.t rooftop solar
o    Also requires a smart grid.
o    Legislature and governor are buying and they are  pushing them
o    PUC is decoupling earnings from electron generation
•    Kauai buying renewable, 70% renewables by 2019
•    Off fossil fuel
•    Better and less volatile rates
•    Public health benefits
•    Climate change mitigation
•    Lower Cost of ownership for EVs
•    Grid resilience
•    Reduced habitat conflict and land required
•    You can give lifetime free day transportation to prevent grid overloading
•    7% -> 9-10%, bank will fund rooftop solar and charging stations in MFH housing
•    Terrible efficiency ratio
•    This creates value for all players
•    Multi-constituent environment
•    Moving Hawaii into leader status
•    Financial status - levers for traditional return
•    Can become a growth vehicle vs dividend clipper as it has more avenues for growth


Be sure to check out the rest of the presentations from Capitalize For Kids 2018.