Bernard Lambilliotte’s Ecofin Limited has filed its latest 13F with the Securities and Exchange Commission, giving us an inside look at the equity portfolio of the London, England-based fund as of March 31, 2015. The firm was co-founded in 1992 by Lambiliotte, who remains its senior managing director and chief investment officer, and has a focus on a number of key sectors, namely the utilities, alternative energy, infrastructure, and environment sectors. Ecofin employs long-term analysis of its focus sectors and the trends that are likely to occur within it, then extrapolates that data to determine its likely effect on individual companies within the sector, using a fundamental approach. Over 40% of the firm’s equity portfolio was invested in the utilities sector heading into the second quarter.
Ecofin’s top picks are notable to us given the fact that two of the five are in small-cap stocks. It’s investors like this who add great value to our small-cap strategy system, as they are heavily invested in the success of their small-cap picks and have poured considerable resources into identifying undervalued or under-the-radar companies to invest in within their sectors of expertise, in case utilities and energy. We have found that collectively, hedge funds’ top small-cap picks provide a great investment opportunity, with our strategy having returned over 137% since it was launched at the end of August 2012, beating the market by a staggering 240% over that period (see all the details).
Let’s run through Ecofin’s top five positions as of the end of the first quarter and see how they fared during that quarter and how they shape up for the second. The countdown begins with NextEra Energy Inc (NYSE:NEE), which remains Ecofin’s top pick for the sixth consecutive quarter. The firm continues to feel strongly about the electric power generation company, increasing its position by 17% during the first quarter to 690,561 shares valued at $71.85 million. After NextEra Energy Inc (NYSE:NEE) shares hit an all-time high towards the end of January, they limped home to finish the quarter down by 1.39%. The stock was recently downgraded by KeyBanc, which lowered its price target on the stock to $108 from $112.50, providing little upside with shares currently trading above $103. Billionaires Daniel Och and Israel Englander had the two largest positions in NextEra Energy Inc (NYSE:NEE) as of the end of 2014 among investors in our database.
Ecofin was even more bullish on Pattern Energy Group Inc (NASDAQ:PEGI) during the quarter, increasing its position in the company by 162% and vaulting it from 13th to 2nd in terms of the firm’s exposure to the stock. Towards that end, it didn’t hurt that Pattern Energy Group Inc (NASDAQ:PEGI) shares did a little vaulting of their own in value, by 16.26% during the first quarter. Ecofin’s position consisted of 1.97 million shares valued at $55.72 million. Billionaire Englander (Investor Letters, Stock Picks) again had one of the largest positions, in fact the largest in our database, amounting to more than 1.46 million shares of Pattern Energy Group Inc (NASDAQ:PEGI).