The Proxy Approach

An iterative process that blends high level quantitative models and methods with thematic fundamental analysis.

The global energy markets (GES) is an essential foundation in modern society with a wide area of applications ranging from fuel production used for transportation to heating and power production. Sources of energy can be divided into fossil fuels such as oil, natural gas and coal to fossil free like nuclear and renewable energy sources. Among renewables there are a wide variety such as hydro, solar pv, wind, bio and geothermal.

Until now the world has been reliant on fossil energy as the primary source of energy. However, this is about to change in something that can be best described as Energy Transition (ET). In the next couple of decades renewable energy sources, especially wind and solar power, will replace fossil energy sources, especially oil and coal, within the GES. This process is underpinned by three factors; falling energy density, electrification of everything and the era of renewable energy sources.

ET is a highly disruptive force paving the way for companies within the energy and energy tech space. Companies with the right characteristics will be rewarded by strong growth. Proxy P has developed an iterative process that blends high level quantitative models and methods with thematic fundamental analysis in order to capture the success factors from  absolute and relative perspectives.

Quantitative and Systematic:

The team behind Proxy exists of both mathematicians and traditional fundamentalists. We base our investment strategies on experience and expertise from energy and commodity markets globally but the sheer volume of available data and the speed by which it is analyzed and processed is changing rapidly.

Proxy has developed a proprietary inhouse built quantitative and portfolio management system that in an iterative way allows us to processes high volumes of data. We apply this iterative process in all parts of the investment process, starting with identifying potential themes related to energy transition that will drive the market and ending with risk management.


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Investment process:

Proxy uses a robust four step investment process combining top down with bottom up as well as quantitative and discretionary overlays.

  • Top down thematic analysis: Identify the most attractive thematic opportunities globally.
  • Categorization: Identify companies that are at an advantage or disadvantage from ETT.
  • Growth analysis: Target growth companies and analyze earnings growth.
  • Growth for the right reason: Make sure growth is correlated to the Energy Transition theme.

Our investment logic is best described as top-down thematic, which means that our investment process starts by understanding the existing and future themes that according to our analysis will decide what category of companies will be at an advantage or disadvantage as well as if the themes were to be fully priced in the market. In the next step we categorize our investment universe according to our thematic analysis and understand the stocks from a bottom up perspective.