Today we are featuring our partner, Spere Financial, who provide investors monthly income from energy savings.
From their CFO, Jeff Johnston-Legg:
COVID-19 investment opportunities
For all the devastation caused to the global economy by the coronavirus pandemic, the chaos is also creating new investment opportunities for astute investors. Baron Rothschild, were he alive today, might have said, “Buy when there’s virus in the air.”
But where to find these opportunities? Many investment writers (including Janice Dennis recently on Rocket Dollar’s blog) have commented on sectors that could benefit from the pandemic, including vaccine research, real estate, remote education, and climate control systems, among others. Most of these opinions have focused on the equity investment side.
For yield-seeking investors—both those desiring regular income and those uncomfortable with exposure to the volatile equity markets—pandemic-related fixed-income opportunities are somewhat rare. Yet the growth in demand for virus-killing purification systems has created the opportunity to invest directly, typically at yields much higher than those available from banks and publicly traded bonds, in companies raising debt capital to fund growth and expansion in this exploding industry.
Why air purification systems?
COVID-19 is an airborne contagion, and companies wanting to stay open during this pandemic (e.g., restaurants, retail stores, day care centers, etc.) are demanding technologies to remove the virus from their locations. Doing so allows them to promote themselves as safer environments than their competitors and to keep their doors open during this economic downturn. This has caused the demand for purification systems to increase dramatically since the onset of the pandemic.
The technology to purify air as it passes through commercial and residential HVAC systems has existed for some time. And recent advances have added the ability to disinfect surfaces as well.
In the 1990s, a NASA research facility discovered the benefits of using UV light and hydroxyl radicals to purify both the atmosphere and surfaces in an enclosed space. Aerus later incorporated this technology into their ActivePure® air purification systems, which have risen steadily in popularity for both commercial and residential use.
Creative financing during tough times
This technology is not inexpensive, however, and many companies find themselves unable to commit the required capital during these difficult economic times. Spere Financial, in conjunction with its affiliate Spere Controls, has long been offering a creative approach to helping their customers purchase energy management systems and HVAC maintenance programs, providing the products and services at zero upfront cost to the customer in exchange for multi-year stream of revenue based on the energy savings generated by the systems.
Spere began incorporating the ActivePure® systems in its energy management and HVAC business in early 2020, adding the equipment to new and existing contracts in exchange for a steady stream of savings-based revenues for five years and longer. The revenue from these contracts supports the monthly payments to investors in Spere Financial’s private 5-year notes. No other company offering the ActivePure® systems offers this type of flexible financing approach to its customers.
No going back
Even after a vaccine for COVID-19 has been proven effective and eliminates the threat to people and businesses, the effects of the trauma inflicted on our cultural and economic systems may never fully disappear. Other new viruses will arise. More familiar viruses—the common cold, influenza, and now COVID-19—will persist. And companies that can claim with credibility that their establishments’ atmosphere and surfaces are being continually purified will have an advantage over those who cannot. The demand for air purification systems and associated technological advancements will continue for a long time to come.