1 00:00:00,960 --> 00:00:04,800 Speaker 1: You're listening to a share these podcast, any kind of 2 00:00:04,840 --> 00:00:07,800 Speaker 1: broader trends that you see out there that are informing 3 00:00:07,800 --> 00:00:08,440 Speaker 1: your portfolio. 4 00:00:08,800 --> 00:00:13,240 Speaker 2: We think a lot about growth of data. We think 5 00:00:13,280 --> 00:00:19,439 Speaker 2: a lot about decarbonization. The next extension of decarbonization really 6 00:00:19,440 --> 00:00:22,520 Speaker 2: has been thinking more about a circular economy and what 7 00:00:23,120 --> 00:00:26,240 Speaker 2: opportunities come from that, which again is not just an 8 00:00:26,400 --> 00:00:29,560 Speaker 2: esg idea, it's actually also just an economic rationalist idea. 9 00:00:29,720 --> 00:00:33,640 Speaker 2: Why I use things once and put them in the trash. 10 00:00:34,000 --> 00:00:36,160 Speaker 2: So I give an example of a really interesting business 11 00:00:36,200 --> 00:00:40,040 Speaker 2: we've invested in for one of our funds. It's called 12 00:00:40,159 --> 00:00:46,400 Speaker 2: viscount Reuse. So when you go to the supermarket, we 13 00:00:46,479 --> 00:00:48,559 Speaker 2: love investing in all the things that you hopefully you 14 00:00:48,600 --> 00:00:50,480 Speaker 2: don't need to have heard of Morrison, You don't even 15 00:00:50,479 --> 00:00:52,519 Speaker 2: need to even realize you use the products you're invested in. 16 00:00:52,760 --> 00:00:54,800 Speaker 2: But when someone mentioned you go, oh that thing, I 17 00:00:54,880 --> 00:00:56,840 Speaker 2: use that every day. I never even thought about the decision. 18 00:00:57,120 --> 00:01:00,920 Speaker 2: So when you go to the supermarket, fruits sometimes comes 19 00:01:01,000 --> 00:01:04,640 Speaker 2: in those cardboard crates which get scrunched down, and then 20 00:01:04,640 --> 00:01:06,560 Speaker 2: when you're moving house you go to the supermarket and 21 00:01:06,680 --> 00:01:11,319 Speaker 2: pick them up from the back. Increasingly around the world 22 00:01:11,440 --> 00:01:14,039 Speaker 2: supermarkets are trying to get away from that and use 23 00:01:14,640 --> 00:01:19,040 Speaker 2: reusable plastic crates. And what's the best way for a 24 00:01:19,080 --> 00:01:22,640 Speaker 2: supermarket to do that. It's to have one pool provider 25 00:01:23,440 --> 00:01:25,520 Speaker 2: so that all of their suppliers are using the same 26 00:01:25,600 --> 00:01:28,160 Speaker 2: kind of crates. They come into the supermarket, then they 27 00:01:28,160 --> 00:01:30,039 Speaker 2: get broken down, sent back to you to clean, and 28 00:01:30,080 --> 00:01:32,200 Speaker 2: then you send them out to their suppliers, and so 29 00:01:32,240 --> 00:01:36,039 Speaker 2: you end up with this very infrastructure like business. You know, 30 00:01:36,080 --> 00:01:37,640 Speaker 2: something which is going to keep being used in the 31 00:01:37,680 --> 00:01:40,800 Speaker 2: next ten years. You're locked in as the sole supplier 32 00:01:40,880 --> 00:01:44,720 Speaker 2: to one of a duopoly or oligopoly the supermarket providers, 33 00:01:44,880 --> 00:01:48,600 Speaker 2: and you can add on some other customers. So that's 34 00:01:48,600 --> 00:01:51,400 Speaker 2: a business we've invested in that ultimately its growth will 35 00:01:51,400 --> 00:01:54,040 Speaker 2: come from the world wanting to be more circular, and 36 00:01:54,120 --> 00:01:56,920 Speaker 2: the supermarkets want to be more circular, partly for ESGM, 37 00:01:56,960 --> 00:02:00,920 Speaker 2: partly because it increases their margins. Up with this really 38 00:02:00,960 --> 00:02:03,840 Speaker 2: downside protected infrastructural like business, but something you never thought 39 00:02:03,840 --> 00:02:04,520 Speaker 2: of as infratructure. 40 00:02:04,600 --> 00:02:07,280 Speaker 1: It's a place comes in where there's real value in 41 00:02:07,360 --> 00:02:10,440 Speaker 1: standardization exactly. It's otherwise where do you send them back 42 00:02:10,440 --> 00:02:11,160 Speaker 1: to exactly? 43 00:02:11,200 --> 00:02:12,359 Speaker 2: And then think of all the ways you can start 44 00:02:12,360 --> 00:02:16,640 Speaker 2: improving that, like make those traceable, allow the supermarket to 45 00:02:16,680 --> 00:02:19,200 Speaker 2: know what temperature that product's been at all the time, 46 00:02:19,320 --> 00:02:21,640 Speaker 2: so they know that has this milk been tainted because 47 00:02:21,639 --> 00:02:23,280 Speaker 2: at some point in the supply chain there's a failure, 48 00:02:23,280 --> 00:02:24,880 Speaker 2: they can work out where it was. So the whole 49 00:02:24,880 --> 00:02:27,480 Speaker 2: lot of ways you can use technology to keep making 50 00:02:27,480 --> 00:02:31,240 Speaker 2: this dumb things smarter and add value to the customer. 51 00:02:31,639 --> 00:02:40,040 Speaker 1: Well infrastructure everywhere. So we've talked a little bit about 52 00:02:40,400 --> 00:02:45,160 Speaker 1: renewables and especially New Zealand's history with renewable but how 53 00:02:45,200 --> 00:02:48,560 Speaker 1: do you see that transition going throughout infrastructure investment throughout 54 00:02:48,600 --> 00:02:49,560 Speaker 1: Australia and New Zealand. 55 00:02:49,840 --> 00:02:53,040 Speaker 2: I'll admit something to my shame, having grown up in 56 00:02:53,080 --> 00:02:56,720 Speaker 2: New Zealand they moved to Australia, and having been on 57 00:02:56,760 --> 00:02:59,080 Speaker 2: the board of Tilt Renewables when we created it all 58 00:02:59,080 --> 00:03:02,240 Speaker 2: the way through to when we sold it, I didn't 59 00:03:02,280 --> 00:03:04,600 Speaker 2: think much new renewable energy development was going to happen 60 00:03:04,680 --> 00:03:06,639 Speaker 2: in New Zealand. Kind of thought, oh, well, we're kind 61 00:03:06,639 --> 00:03:09,480 Speaker 2: of done. Know we're at ninety percent. And what I 62 00:03:09,560 --> 00:03:13,200 Speaker 2: hadn't factored in was the rest of the electrification of 63 00:03:13,240 --> 00:03:17,320 Speaker 2: the economy. So how do you go from Fonterra burning 64 00:03:17,360 --> 00:03:22,120 Speaker 2: coal to turn milk into milk powder to using renewable electricity, 65 00:03:22,440 --> 00:03:25,520 Speaker 2: cars running on renewabal electricity. See realized there's actually all 66 00:03:25,520 --> 00:03:27,919 Speaker 2: of this demands. Even when you're at nine percent renewables, 67 00:03:28,120 --> 00:03:30,400 Speaker 2: Probably in New Zealand will still double its renewable energy 68 00:03:30,400 --> 00:03:37,440 Speaker 2: capacity over the next few decades. Australia has gone very 69 00:03:37,520 --> 00:03:40,440 Speaker 2: slowly and is now starting to make progress at getting 70 00:03:40,480 --> 00:03:46,680 Speaker 2: towards sixty seventy renewables, and that won't actually be driven 71 00:03:46,840 --> 00:03:52,200 Speaker 2: by policy. That'll be driven by old coal plants breaking right, 72 00:03:52,320 --> 00:03:55,800 Speaker 2: so that reaching end of life. So that's kind of inevitable. 73 00:03:56,080 --> 00:03:58,560 Speaker 2: So there's a lot of opportunity in Australia. Probably the 74 00:03:58,600 --> 00:04:01,280 Speaker 2: biggest constraints in the moment in Australia is just the 75 00:04:01,360 --> 00:04:05,600 Speaker 2: scale of the transition required means you're rewiring the whole country. 76 00:04:05,720 --> 00:04:09,160 Speaker 2: So in one of our other portfolios, Utilities Trusts of Australia, 77 00:04:09,800 --> 00:04:12,480 Speaker 2: we are a shareholder in Transcrid the poles and wires 78 00:04:12,520 --> 00:04:15,320 Speaker 2: of New South Wales and Electronet the poles and whis 79 00:04:15,360 --> 00:04:20,200 Speaker 2: of South Australia. Those businesses are literally investing billions of 80 00:04:20,240 --> 00:04:23,279 Speaker 2: dollars to rewire from a system that was based around 81 00:04:23,360 --> 00:04:26,480 Speaker 2: generating in a few small coal a few big coal 82 00:04:26,520 --> 00:04:29,560 Speaker 2: power plants, to one where actually there's renewable energy all 83 00:04:29,600 --> 00:04:31,200 Speaker 2: over the state and you need to connect up your 84 00:04:31,200 --> 00:04:34,280 Speaker 2: states to manage intermittency, so all of that stuff has 85 00:04:34,279 --> 00:04:37,280 Speaker 2: to get worked through. So that'll mean there's short term 86 00:04:37,520 --> 00:04:40,560 Speaker 2: difficulties friction points in Australia, but long run will look 87 00:04:40,560 --> 00:04:46,000 Speaker 2: really interesting. And then you look globally, whatever happens out 88 00:04:46,040 --> 00:04:49,239 Speaker 2: of the big beautiful bill that's going through at the moment. 89 00:04:49,680 --> 00:04:51,360 Speaker 2: One where another US is going to build a enormous 90 00:04:51,360 --> 00:04:54,200 Speaker 2: amount of renewable energy just because it needs the power 91 00:04:54,200 --> 00:04:57,200 Speaker 2: in it is brood economics. The lowest cost form of 92 00:04:57,240 --> 00:04:59,920 Speaker 2: power is solar or solar plus batteries in the US. 93 00:05:01,360 --> 00:05:05,279 Speaker 2: Europe's got an energy independence issue, so it's not just 94 00:05:05,320 --> 00:05:07,840 Speaker 2: about renewables there, it's actually how do we reduce our 95 00:05:07,839 --> 00:05:10,599 Speaker 2: dependence on Russian gas, so you need to all have 96 00:05:10,760 --> 00:05:14,000 Speaker 2: your own renewables. And then Asia you've got growth of 97 00:05:14,040 --> 00:05:17,560 Speaker 2: demand for energy as well as you know, as people 98 00:05:17,800 --> 00:05:23,440 Speaker 2: get wealth there in the economies industrialize along with decarbonization pledges, 99 00:05:23,520 --> 00:05:25,520 Speaker 2: so you think all around the world you see different 100 00:05:25,560 --> 00:05:28,039 Speaker 2: reasons for people to be doing a lot more. The 101 00:05:28,360 --> 00:05:31,920 Speaker 2: really unidealistic way to think about renewable energy, Like you 102 00:05:31,920 --> 00:05:34,360 Speaker 2: can think about it as an idealist, and I do, 103 00:05:34,640 --> 00:05:36,680 Speaker 2: but the unidealistic way to think about it just as 104 00:05:36,720 --> 00:05:40,320 Speaker 2: an investor is actually it's an option strategy. So you 105 00:05:40,400 --> 00:05:44,480 Speaker 2: know that you can have complete confidence in the trajectory 106 00:05:44,680 --> 00:05:47,120 Speaker 2: of the world. Over the next two three decades, a 107 00:05:47,120 --> 00:05:49,880 Speaker 2: lot more renewables will be built. It's really hard to 108 00:05:49,880 --> 00:05:53,440 Speaker 2: be certain in the next twelve months which specific solar 109 00:05:53,440 --> 00:05:56,359 Speaker 2: farm or wind farm will get built because there's a 110 00:05:56,440 --> 00:06:00,120 Speaker 2: change in energy prices or a change in regulation. You 111 00:06:00,160 --> 00:06:03,760 Speaker 2: can have renewable energy development options in as many places 112 00:06:03,800 --> 00:06:06,760 Speaker 2: as possible, with great teams working on them, and then 113 00:06:06,839 --> 00:06:08,960 Speaker 2: optimize at each point which one you should be putting 114 00:06:09,040 --> 00:06:11,520 Speaker 2: your two three hundred million dollars into. Actually taking from 115 00:06:11,560 --> 00:06:14,680 Speaker 2: being a plan to being reality, you'll find that you're 116 00:06:14,680 --> 00:06:17,800 Speaker 2: constantly surprised on the upside, rather than kind of having 117 00:06:17,880 --> 00:06:20,880 Speaker 2: like a single pinpoint bet on one company or one 118 00:06:20,880 --> 00:06:22,800 Speaker 2: project of that. 119 00:06:23,160 --> 00:06:24,680 Speaker 1: Do you think that we can be leaders in the 120 00:06:24,680 --> 00:06:26,280 Speaker 1: field of how that develops. 121 00:06:27,040 --> 00:06:31,760 Speaker 2: I think we already are. Like if you think about 122 00:06:32,480 --> 00:06:37,040 Speaker 2: New Zealand, had this ADVANTAGEHI built from its disadvantage artists 123 00:06:37,839 --> 00:06:41,160 Speaker 2: from not having a lot of coal and gas. It 124 00:06:41,279 --> 00:06:45,480 Speaker 2: got really good at wind generation. And then for Morrison, 125 00:06:45,560 --> 00:06:48,039 Speaker 2: we took that idea that we've been working on the 126 00:06:48,080 --> 00:06:51,440 Speaker 2: nineties in New Zealand and started getting options in Australia 127 00:06:51,480 --> 00:06:55,280 Speaker 2: in the late nineties that we created Tilt Renewables, which 128 00:06:55,480 --> 00:07:02,039 Speaker 2: we which an infertal investment that we sold twenty one 129 00:07:02,120 --> 00:07:06,080 Speaker 2: twenty two. Out of that experience, we set up Long 130 00:07:06,160 --> 00:07:09,160 Speaker 2: Road Energy for intilling the New Zealand super Fund in 131 00:07:09,200 --> 00:07:13,360 Speaker 2: the US. That's been a phenomenal investment now worth several 132 00:07:13,400 --> 00:07:18,320 Speaker 2: billion dollars. Took that to the Europe, took it to Asia. 133 00:07:19,040 --> 00:07:23,680 Speaker 2: So yeah, and that's just really kind of slowly over decades, 134 00:07:24,280 --> 00:07:26,760 Speaker 2: reinvesting in the fact that you've got to hit start 135 00:07:26,800 --> 00:07:28,040 Speaker 2: on the world and something they need more of. 136 00:07:28,320 --> 00:07:31,320 Speaker 1: Investing involves risk you might lose the money you start with. 137 00:07:31,680 --> 00:07:35,400 Speaker 1: We recommend talking to a licensed financial advisor. We also 138 00:07:35,440 --> 00:07:38,760 Speaker 1: recommend reading product disclosure documents before deciding to invest.