Database Screening – 600 Companies
Greenchip has built an investment universe of over 600 environmental businesses with approximately $6.0 trillion in aggregate market capitalization. While there’s always an element of subjectivity in determining the degree to which a business is environmental, we use a combination of our own experience and judgment, an advisory committee, and external research to build and maintain this universe. Regular screening is performed on the full 600 company universe with emphasis on margin expansion, revenue growth, balance sheet quality, and cash flow multiples. No matter what the prospects are for a company or an industry, an investment will only pay off in the long-term if the valuation at purchase is appropriate.
Extensive Due Diligence – 150 Companies
More intensive due diligence is performed on the companies that pass screening: a review of financial reports and presentations, management interviews, and building of a discounted cash flow model.
Greenchip believes identifying environmental, social and governance risks prior to investment can improve investment outcomes. Our process monitors financially material ESG information during the fundamental analysis stage of our investment analysis. By reviewing all publicly available information and through discussions with the companies, we gain valuable insight into a company’s ESG performance. Any company not properly managing their ESG risks will not be considered for inclusion in the portfolio.
Concentrated Portfolio – 30-35 Companies
We maintain a concentrated portfolio of 30-35 securities, careful to ensure diversification by geography, company size, and environmental sub-sector.