The upshot of managing a global portfolio is one gets to see the world. Stephen Johnston and I were fortunate enough to have spent the past two weeks travelling through Hong Kong, London, Boston, San Francisco and Silicon Valley visiting companies, hearing from industry thought leaders, academics, corporates and fellow institutional investors. After 25,000 miles of travel, and seeing many pieces to the puzzle, the challenge now is connecting the dots.

Beyond the macro economic environment and cyclical element of investing there are some big picture trends happening right now that will fundamentally shift industries and create corporate winners and losers.

One trend that is particularly interesting is in clean mobility, where conventional transportation is set to be disrupted by the coming together of the following technologies:

  • Connectivity and the Sharing Economy – e.g., Google Maps and taxi hailing applications, such as Uber
  • Solar energy – cheaper and higher efficiency panels
  • Battery power – enhancement of lithium batteries for use in electric vehicles
  • Driverless cars – development of the laser radar (or LIDAR)

These 4 areas are the ingredients to creating fleets of driverless cars available on-demand as a service, running off clean energy sources. The key benefits of this are that cheaper transport would be widely available to the masses. It would create less pollution and there would be less need for traditional forms of infrastructure. Importantly, the 1.2 million lives that are lost every year to road accidents should be significantly reduced.

Google has already completed over 1 million miles of driverless car testing. The US State of Nevada is allowing testing of self-driving trucks. LIDAR sensors, a laser that sends out and returns 1 million signals per second for the vehicle to ‘picture’ its surrounding, has seen its cost fall from US$70k in 2012 to US$10k by end of 2013, and will be US$1,000 by end 2015[1].

The future is now.

Felix Fok

Portfolio Manager

Disclaimer: This is intended to provide general information only. It does not take into account your investment needs or personal circumstances and so is not intended to be viewed as investment or financial advice. Should you require financial advice you should always speak to an Authorised Financial Adviser.

[1] Tony Seba – Leading Market Disruption; Quanergy