The market is obsessed with AI as the sole driver of energy demand, but the “Saaspocalypse” of February taught us that picking AI winners is a volatile game. In this episode, Mark Jones from Resolution Capital explains why the real opportunity lies in the “picks and shovels” that power the modern world: Electricity Utilities.
We dive into why Resolution Capital has doubled down on utilities (60% of the portfolio), the reality of the US re-shoring trend, and why this is a multi-decade structural shift that remains underappreciated by the broader market.
In this episode, we discuss:
- Defining a Great Investment: What separates a “good” asset from a truly “great” infrastructure investment in the current macro environment?
- Post-Saaspocalypse Lessons: How the February crash in AI-adjacent software reshaped the way Resolution Capital views “AI beneficiaries.”
- The Utility Overweight: Why electricity utilities are now more than double the size of the next largest position in the fund.
- The Energy Thesis (Beyond AI): AI consumes a massive amount of power, but is that the only reason to own these stocks? We look at the intersection of decarbonisation and digitisation.
- The “Re-Shoring” Factor: How much of the US energy demand relies on the return of manufacturing, and would a change in the White House administration kill this trend?
- Spotting the Obvious: When an investment theme looks “too easy,” the returns are usually gone. Mark explains what the market is still missing about the demand side.
- Managing Risk: From regulatory hurdles to the “build-out” risk—can we actually build too much infrastructure?
- The Australian Angle: Does Mark hold any local names in that 60% power allocation?
- Stock in Focus: A deep dive into a “great utility” currently held in the portfolio and why it fits the Resolution Capital framework.
