Managing Partner & Senior Portfolio Manager, L2 Capital
Marcelo is a Senior Portfolio Manager and has worked in large international asset management companies, such as London & Capital and Gartmore Investment Management, both in London. Marcelo has a degree in Mechanical Engineering from PUC-MG, International MBA at IE Business School in Spain and specialization in Finance from Helsinki School of Economics & Business Administration, in Finland. He is the founder and senior portfolio manager at L2 Capital Partners, an asset management company based in Brazil and with focus on opportunities worldwide.
Keynote Presentation: The uranium market in 2020
The uranium market has recently attracted the attention of many investors, due to its resilience during, and after, the sharpest crash in equities in history.
We re-visit the case and show that the gap between supply and demand has not been this wide in so many years, and this has many implications. Giants in the sector, like Cameco and Kazatomprom, have cut their productions dramatically, increasing the deficit even more.
Besides, the support for nuclear energy towards a cleaner world has been gaining traction recently, as India, China and Russia move forward with the construction and the development of new nuclear reactors.
The US, which used to be the leader in the sector, has seen its importance diminished over the past few years, but the recent administration has taken steps to remedy the situation. In addition, the surge in the development of small modular nuclear reactors (SMNRs) is noticeable.
We are seeing an increase in demand for uranium and the price is not incentivizing any mines to come online. Actually, the price is giving an incentive for existing mines to cease operations, with direct impact on supply, which has been reduced from 62.3m tons in 2016 to just under 40m tons in 2020 (L2 Capital estimates).
Financial investors are looking for asymmetric investment opportunities, with lots of upside potential and low risk (downside). Uranium has proved to be a perfect tool for fund managers to diversify into a commodity that has sailed through the fastest crash in history with flying colours. Uranium price has not only not come down, but it went up substantially, even during days in which gold, the so-called safest investment overall, has gone down.
Today, most of the issues that have kept uranium prices down are out of the way, and we are looking into one of the biggest investment opportunities in the financial markets.