hey guys,
Do you guys have any experience direct investing in renewable energy/sustainability, or doing equity research into the sector?
Do you have any experience in utilizing the finance skillset for doing good in the world?
I am not terribly passionate about business or finance, but I did pursue this path (mostly PE, but did spend time in an IB & equity research rotation) because I wanted to gain some skills that I could use later to make the world a better place.
I don't particularly relish just making a living.
I want my job to mean something to me, and that means doing things that make the world better - such as working in renewables, healthcare, or other positive push-society-forward and solve-problems way.
Does anyone have advice and experience on taking the finance experience and skillset and putting it to use doing good in the world?
Thanks.
I've written a few comments about this topic in the past, but have honestly gotten too lazy to comment much anymore. Do you have any specific questions?
My background: - Have been at a multi-billion dollar impact investment firm for the past few years - Work on direct PE investments (growth equity, buyout, infrastructure) across typical impact sectors (renewable energy, education, healthcare, sustainable food & agriculture etc). About half of the deals are in the US and the other half in Latin America, Africa, and Southeast Asia - Previously spent a couple years in IBD at a top BB focused on relevant sectors (e.g. renewable energy, healthcare)
There are definitely people on this forum who could easily identify me from this info above (very few people doing this kind of work) so I try not to post too much and prefer PMs.
hi HB, I'd really like to hear more about your experience. Hope you can elaborate without revealing more about yourself than you wish. Is there more you can share about how you learned this industry? And how did you get in?
To be honest, I didn't really know much about impact investing until I joined banking. But back in college, I chose my particular banking group since it let me work in certain sectors that affect society in positive ways (e.g. renewables, healthcare) because I hoped to use that knowledge in the future.
I quickly learned that just because you're a healthcare company for example, it doesn't mean that you're having a positive impact on the world. There are tons of healthcare companies out there that exploit cancer patients or low income populations (e.g. big pharma / insurance companies) or cut costs at the risk of human lives (e.g. ambulance companies).
I also knew that I didn't want to keep going down the traditional finance path, where you just make as much money as possible (even if you hate the work) and maybe volunteer a few hours or donate to nonprofits in your spare time. I spoke with tons of mid-level and senior-level finance / PE guys who felt like they never really accomplished anything meaningful as they looked back on their careers (seriously, just read all the existential experienced PE/HF threads on WSO), and I wanted to avoid that.
At that point, I started to become interested in impact investing. It's honestly a tough field to learn about because there's not much media coverage about it, the deals tend to be smaller sized, and it tends to be more international. For example if you search WSO for the names of some of the biggest and most well-respected impact funds, you end up with almost no results. Also, family offices are actually some of the world's largest impact investors (yes, some are even larger than TPG Rise) but they tend to be fairly private and don't make it into the news much.
There are some resources online (like ImpactAlpha or GIIN) and conferences (SOCAP), but mostly you need to talk to people who work in the field. Most headhunters / recruiting firms won't be able to help you much because there are just not that many opportunities out there (although it's still worth getting connected with them in case they do come across an opportunity; that's actually how I got my role).
My advice to anyone interested in the field would be to: 1. Talk to as many people as possible in the field to hear about the opportunities that come through word-of-mouth 2. Look for firms that are under the radar (within the traditional finance industry) by reading impact investing news 3. Connect with headhunters in case an opportunity does happen to come up 4. Make yourself as competitive as possible in case you do get an interview (this a whole different discussion topic, but you need the right combo of both investment and impact experience to stand out among lots of candidates)
SB to every one of your comments sir.
Every now and then one finds gold on WSO. Helpful people like you are why I keep coming back. Wish I could buy you a beer online.
Hi HB - thanks for your time! Could you elaborate more on #4 please about having the right balance of investment vs impact experience? What did you do to stand out in the recruitment process?
Bain Cap / TPG Rise / Pegasus Capital Advisors are top three funds in the ESG / do good space.
Thanks ATL, Really appreciate it. Can you tell me more / got decks? How can one crack in there? I'm sure it's quite competitive.
I wouldn't necessarily agree with that because it's really not that simple (as someone who has actually competed with and collaborated with all three of those groups multiple times). There are other impact funds out there with longer track records, more experienced teams, and more capital raised.
Just a few examples: Leapfrog Investments (consistent 20%+ IRRs across 3 funds so far, specialist knowledge in healthcare and financial services), GS Urban Investment Group ($5B+ capital deployed with decent returns, real estate specialists), Generation Investment Management (Al Gore's investment firm; they've raised a ton of capital, albeit returns on the PE side have been fairly mediocre), Actis (the largest and most dominant emerging markets investor, great returns especially in renewable energy; for some reason they're barely talked about on this forum), DBL Partners (great returns because they were the first institutional investor in Tesla, SolarCity, and others; I know they're more VC than PE, but just trying to demonstrate a point).
TPG and Bain honestly don't even really have actual track records yet because they've only been around for a few years, so time will tell once exits come in (if a recession hits in the next year or two, that could be pretty bad timing for them).
are there any ibanks focused on ESG / renewables ?
I would be happy also to try my hand at equity research or IBD if it's in the right sector...
The main renewables-focused investment banks I know of are Greentech Capital Advisors, Cohn Reznick Capital, and Marathon Capital.
Some of the bulge bracket banks also do renewable energy work, but oftentimes its part of their general energy / power groups. I've been out of the bulge bracket investment banking world for several years though so my knowledge is not totally up to date.
Yep, frequently will be rolled up into other groups, otherwise the main ones are listed above. Roth also has a dedicated group.
Piper used to have a dedicated Ag, Clean Tech, and Renewables group, but that was disbanded (rolled up into industrials), spun out again, then disbanded just last year again (split into consumer and tech)
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