NAC, NAC. Who's there? - Part 2

Audio version of the article right below the paywall

In part 1 of this article I focused on the potential negative aspects of natural asset companies — on the possibility they are simply another money grab from people wanting to profit from the energy transition push and on the danger of these companies ending up as one more way to keep poor people poor and make not-so-poor people poorer.

In this part, I will focus on a more positive scenario that Ed Hirs laid out for me during our recent discussions on the topic of NACs. I must state early on that Ed, besides being immeasurably more knowledgeable than me, is also a much more positive person than I am. I would never have imagined the scenario he suggested for NACs because my suspicious, always-expect-the-worst mentality wouldn’t allow it.

Anyway, here’s the scenario: NACs doing exactly what it says on the label… and not making a lot of money out of it. Not through an oversight or bad planning, but by design.

In the first part of this story I assumed the kind of investors NACs would attract would be the impatient kind, eager to make a profit quickly. But what if, as Ed suggested, NACs attract another kind of investor — the long-term kind who doesn’t focus so much on the size and speed of the return on their investment and is much more interested in the long-term opportunities that the investment might open up.