Who is leading the league tables in renewable energy advisory? What banks have the best reputation? What is better RE experience on the banking end, PF or M&A?
Does anyone know the corporates, coverage groups, and PE players in the space that are located in Houston? Seems like most groups are located in SF & NYC.
Also, seems like a lot of Jr. people in O&G are interested in transiting to RE.
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Heard that GS is expanding coverage into Energy Transition out of their Houston office. A few O&G funds have also ventured into the space with Encap’s Energy Transition Fund and Quantum’s investment into EV charging station through ChargePoint. Still a small market but interesting to see where things go.
I don’t work at a bank but I work in RE & infrastructure.
A lot of RE investments are made by Australian, Canadian and US funds. Most funds in the US are not located in Houston or Texas at all. For example, in NYC, Some funds are branches of foreign funds and Some very large American PE players have their infra arms. Could be wrong here, but in terms of RE, Houston is not very relevant, based on the transactions I’ve worked on so far.
Houston is irrelevant in renewable energy finance at the moment. Power and utilities groups in banks are located in NY. Only renewable funds in Houston are: Quinbrook (Aussie fund that’s made a splash on some projects in US), Encap (launching a renewables fund, has 4-5 people now) and Riverstone (also 4 or 5 power people in Houston). Quantum isn’t a real player, they’ve done like 3 deals in the space making up 10% or less of latest fund.
I really don’t see this changing in a big way, renewables have been actively covered for over a decade and SF, NY and Chicago have a stranglehold. It’s possible some bankers that cover the majors could start pitching clean tech or power ideas.
This is very precise and I’m not sure why there are no SBs. Houston maybe is making some efforts but the fact is it’s almost irrelevant at the moment.
Worth noting that several funds and advisory groups in the sector are headquartered in San Francisco.
Generate Capital, an IPP type player focused on earlier-market-stage clean infrastructure (though invests through a fund), is headquartered in San Fran. Guggenheim's renewables group mostly operates out of San Fran as well. Finally, many developers and project financing groups within strategic are based in San Fran.
I would say a transition has started in Houston, but existing groups in NYC, Chicago, etc are currently the main players. The interesting thing about the Houston banks is that a large portion of their clients have RE capital set aside. I've heard of more and more groups out of Houston pitching RE projects and sometimes winning just because they have the connections to the capital providers. It will be interesting to see how the traditional oil and gas energy advisory firms adjust over the coming years to take advantage of the RE opportunity. If you wanted to work in RE today though, I would say Houston is not the place to do that (not yet).
Houston's definitely trying to make a big long-term move into renewables. More buyside, but somewhat sellside too. The big three E&P funds (Encap, Quantum, NGP) are all moving into the space. Encap has a whole separate fund with 4 MDs with development experience. Quantum hired the former CEO of EDPR, they just won an auction in Greece and owns an active US wind and solar developer. NGP is currently starting their own renweables platform. Lime Rock has the New Energy group (though based out of Connecticut).
More and more buzz around renewables when you go down to Houston, esp with the structural shift that oil and gas has gone through from growth to value investment. Nowhere near a hub yet, but the big Houston energy guys are now pushing big chip stacks into renewables and energy is already core to the city -- wouldn't be surprised to see it become a minor hub for renewables in a couple of years.
NGP has had a clean tech arm in Washington for over 10 years (though it stinks), wasn’t aware they were moving anything to Houston.
I’ve been doing energy/infra for over 10 years and frankly think renewable energy/project finance is far less complicated than oil and gas, so I am hopeful Houston can stake a claim. A lot of the current ecosystem is from alums of Horizon Wind and Pattern, both of which barely predate shale before everyone refocused
Heard NGP was doing something in Dallas actually, so good point -- not Houston. Definitely true on the Horizon / Pattern part. And definitely agree re: skills as well -- lots of domain transfer from specifically midstream/MLPs into power/project finance/tax equity.
UBS London is quite active in the space
Lazard puts out an thorough report every year called the levelized cost of energy, which is often cited by a lot of publications. I don't know for certain but I'd guess if they are making this report for the past several years they are active in the space.
Have a look at Greentech Capital Advisors
From the advisory side: Greentech and Marathon are the top two that come to mind, TPH I think is looking into energy innovation as well, but I could be wrong. I think what you tend to see is larger banks will have “Alternative Energy” teams or “Renewable Energy” teams, but what they do is less advisory relative to what you’d expect a typical M&A team to do, and more project finance, and even tax equity up until now. I summered at a BB group like this, and can tell you JPM, BAML, and GS are prominent in the PF/tax equity space, with JPM being the top dawg for TE. But as the tax credits wind down (no pun intended) I’m not sure how things will shift. If it’s really renewables you’re into and want to actually be in the weeds, you’ll probably want to end up at an energy/infra PE shop like Capital Dynamics, ArcLight Capital and the likes, or the finance arm of a highly active developer, like invenergy, EDF, Acciona, Algonquin, NextEra, etc.
The large, full service investment banks advise on all the largest portfolio divestitures / IPP sales. The tax equity leasing / syndication groups are housed separately from the investment banking groups. There is some communication between Power & Renewables IB and the Tax Equity Groups, but they are separate by and large. What you don't seem to acknowledge in your post, is that the large banks can leverage their balance sheet for tax equity deployment to win M&A and capital markets deals; tax equity is not an investment banking product, so this isn't barred by regulation.
Pattern Energy, NRG Yield, etc have all been run by major banks such as Credit Suisse, BAML, Citi, and JPM. RBC has also run a couple very large processes. The boutiques such as Greentech Nomura, Marathon, CohnReznick, and others that are popping up, do a large volume of single asset & smaller portfolio divestitures. The smaller devcos, such as C&I solar companies, are also often divested by the boutiques given the smaller scale (and therefore, smaller fees).
Could you possible speak more to what these tax equity groups actually do related to renewables? My bank has one and I’ve thought about pivoting but am not actually very sure on what the group does/what potential exits might be.
Could you possibly speak more as to what these tax equity groups actually do related to renewables? My bank has one and it piqued my interest.
citi also has a very active alternative energy group, albeit separate from PF. know they’re growing it and increasingly working on ABS as tax credits dry up.
Crude ripping to $80 by '22, book it.
nice call
I work in this area. Generally, the top banks are the French / Japanese PF shops. To add some perspective here are the top 10 Renewables MLAs in the league tables:
1. MUFG
2. Keybank
3. CoBank
4. SMBC
5. CIBC
6. HSBC
7. Societe Generale
8. Rabobank
9. Santander
10. National Bank of Canada
Where does Credit Agricole stand among this?
Also in this space and can confirm these are the names you see on a lot of the transactions where banks are providing back leverage to tax equity financed renewable projects. A few of these names pop up on the advisory side every now and then, but not as much as some of the other names listed in the post above.
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