Renewable Energy Investment Banking: Post MBA Target Firms?

I am entering a full time MBA program (M7 program with a strong finance reputation) with the goal of exiting to renewable/clean energy IB upon graduation. I am hoping for some advice on which firms to target.

My understanding is that renewable/clean energy teams will be grouped into the energy group of most banks. Can anyone speak to that? The school has fantastic access to IB firms but the recruiting starts early. I am hoping to have a game-plan for recruiting come fall. In order to do that I will need to have a better understanding of which firms are the big players in that space. Anyone currently in renewable/clean energy (or even just energy) IB that can help point me in the right direction? I do plan on talking to current students/alumni but I think that this forum is good at providing some context for these types of things.

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Comments (16)

  • Analyst 1 in IB - Ind
May 26, 2020 - 10:59pm

There have been a few recent threads on this topic in the last few months that would be good to look over. Generally, would say clean tech/renewables is covered out of SF and NY, with more of a clean tech focus in SF and the commercial scale renewable projects in NY. Seems to be some talk of Houston legacy energy teams trying to move into the space as the oil majors start to invest in the energy transition, but would still be mostly O&G for the foreseeable future.

As an associate at the larger firms, I am not sure you could be pure-play renewables unless from the start and would likely start in a more generalist role within P&U or Tech. Since the investment universe is still relatively small, my BB currently has a MD in NY covering the project/infrastructure side, a MD in SF covering the tech side, and a MD in Houston working with the Majors/PE shops looking to invest in the sector. Assuming the other big banks are similar, you may not be able to completely "major" in renewables until you are a few years in depending on the office environment.

My take would be that the choice (for the larger banks) would be between going into P&U or West Coast Tech on the coverage side. P&U would likely give you better probability of working on renewables but it would likely be very project based and similar to power deals. On the other side, tech would probably give exposure to higher growth "cooler" clean tech, but your experience would likely be more broad as the tech teams generally have bigger fish to fry than clean tech.

All of this is from the prospective of one BB, so this may be very different than other experiences

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May 27, 2020 - 12:18am

Check out Piper Sandler's Renewables group. Believe that's the only dedicated renewable team among the middle market and above. During an interview a couple years back, I spoke with the group head and he did mention this business is very boom and bust and they sort of diversified. Based on this page, they now diversified into cannabis lol http://www.pipersandler.com/2col.aspx?id=2286

Marathon Capital is another. My friend interned there. https://www.marathoncapital.com/

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  • Associate 1 in IB-M&A
May 27, 2020 - 6:37am

Raymond James just started a water-focused group. Macquarie also does a lot given its market leader position in infrastructure.

The thing is...well...lots of people come to school (I went to Columbia/Booth) saying what you're saying- you want to work on only green energy. But the reality is that that segment of the energy market is relatively small compared to traditional P&U, and is lumped into those groups at the BBs. The only firms where you can focus only on green energy are going to be small, less known, and less desired by your classmates.

So you will need to make a choice - are you going to only Target those small firms or are you going to "sell out" a bit because you like the idea of Goldman Sachs (where, in the NR group, you will be more likely to work for fossil fuels/mining than green energy)? Maybe you'll opt for a generalist program instead.

That's the harsh truth with green IB: you sort of have to pick between prestige and working only on what you want.

  • Analyst 1 in Other
May 27, 2020 - 12:05pm

For infrastructure groups, also look up Evercore, BNP, Soc Gen, MUFG, Mizuho, MS, RBC, Barclays, HSBC.

Jul 21, 2020 - 10:43pm

Might be a bit late, but renewables is in a very transformative stage right now and you would likely benefit from going to a larger bank (although boutiques still are extremely relevant). Given the highly contracted nature of utility scale renewable assets and their emergence as a very established, derisked asset class, it is becoming difficult for financial sponsors to compete with strategies in the space due to the low cost of capital of strategic. distributed generation and storage are growing in popularity, but this is smaller scale and a bit earlier stage.

The larger, well capitalized financial investors are leaning towards investing directly into DevCos and IPPs to realize greater upside on their returns by taking on development risk. bulge bracket banks generally are the lead advisors on these larger, platform m&a mandates, so if you want to cover that then go there.

if you are more interested in working with smaller developers and working across asset and portfolio divestitures, then a strong boutique is likely a better fit.

  • Associate 1 in CorpFin
Jul 21, 2020 - 11:35pm

can someone post P&U league tables for the main products? I'm participating in pre-mba recruiting now and i feel like every group is telling me they run the tables but I can't verify because I don't have subscription to capital intelligence anymore.

Jul 22, 2020 - 1:42am

Clean tech and renewables is almost entirely covered out of the power and utility groups of the respective banks. In some cases, if the company is venture backed and based in SF, then the SF office may have some involvement (one example of this would be in the case of an IPO like SunRun).

That being said, some of the power and utility groups do more renewables than others. Citi for example from what I've seen does much more on the conventional side, same with Barclays. BAML on the other hand does (or used to at least) a lot more renewables, with Ray Wood having basically come up with the YieldCo as a concept.

If you want to be in banking and in renewables for the rest of your career, then you can look at some of the smaller renewable energy focused boutiques, which probably get a lot more technical on the industry side of things, but smaller transactions / lower comp.

I'll just add one point, as I was going through the earlier responses. Even within BB Power/Energy groups, there is specialized coverage at the MD and Director level (and VP to some extent). The renewables guys usually cover only renewables, conventional guys conventional. I've seen analysts request only renewables and pretty much have that shape 80-90% of their 2 year experience. It would not be very difficult to request as an associate that you want to be staffed on those projects / work with those MDs. In my experience there was actually less demand (staffing-wise) for renewables transactions vs. conventional, so if you come in and are passionate about clean tech and renewables, I would be surprised if you faced pushback working (almost exclusively) on those deals.

Jul 22, 2020 - 10:29am

Spot on, but compensation at the top renewable energy boutiques rivals, and sometimes exceeds, the compensation from bulge bracket P&U groups. The renewable boutiques do a ton of volume, and will pay to retain their talent.

What can be confusing when looking at bulge-bracket banks for renewables and power is the split between IB and Principal Investing (Tax-Equity). Tax equity is performed by separate principal investment teams at large corporate banks, although they will often work synergistically with IB to help maintain relationships with large IPPs and developers (tax equity is a product similar to debt). If you want to stay in renewables M&A, either at a financial sponsor or in investment banking, I would stick to IB and avoid a tax equity team. You'll learn tax equity in the IB role as well, given its absolute necessity in the capital structure for renewable power generation. However, tax equity has its own exit opportunities including structuring and M&A roles at large strategics.

In terms of renewable specific league tables, google BNEF (Bloomberg New Energy Finance) league tables. It's a bit skewed due towards boutiques due to measuring by deal count, but gives a good indication. Larger independent advisory firms like Centerview have also been pretty active in the past, but you'd likely be a generalist (which is a good thing) going to a premier advisory firm like that.

Jul 22, 2020 - 11:20am
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