Jun 18, 2020 · 48m · capital-allocators
Sustainable Investing 4: Emanuel Citron – Sourcing Sustainable Managers (Capital Allocators, EP.142)
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of Capital Allocators, host Ted Seides interviews Manny Citron, Managing Partner of Volery Capital, to discuss the firm's growth equity strategy of backing and institutionalizing sustainable private market asset managers. Citron details Volery's proprietary manager mapping, ALPHA underwriting framework, value-creation playbook, and the broader mainstreaming of market-rate impact investing.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Ted holds 19% of the talking time here. How this is scored →
Ted as informed peer 2.6 Guest teaching 3.1 Guest disagreement 0.1 Ted pushing back 0.3
speaking balance: gold is Ted, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 15:55 Reframing impact as commercial rather than purely philanthropic
Citron gently counters Seides's assertion that his strategy seems strictly return-driven by insisting that commercial market mechanisms are necessary to achieve real, sustainable impact.
Hardest push from Ted ▶ 43:45 Questioning the omission of governanceSeides directly challenges Citron's explicit focus on environmental and social factors, pressing him on why corporate governance was left out of the core thematic scope.
Biggest teaching moment ▶ 28:01 Comprehensive breakdown of the ALPHA diligence frameworkCitron delivers an authoritative masterclass detailing how Volery evaluates GP operational integrity, metric standardization, and organizational culture via the ALPHA methodology.
Ted holds their own ▶ 15:44 Pinpointing commercial tension in impact thesisSeides cuts through marketing buzzwords to point out that Citron's operational framework resembles traditional commercial private equity far more than values-based philanthropy.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Ted as informed peer | Guest teaching | Guest disagreement | Ted pushing back | Why |
|---|---|---|---|---|---|---|
| AlphaSense Platform Sponsorship and Verification Capabilities | 0 | 0 | 0 | 0 | Solo sponsorship read and platform introduction by host Ted Seides. As a monologue segment, all interaction scores remain at zero. | |
| Miniseries Context and Introduction of Emanuel Citron | 0 | 0 | 0 | 0 | Solo introductory framing detailing the sustainable investing miniseries and introducing guest Manny Citron. Monologue rules apply with all scores at zero. | |
| Manny Citron's Early Career and Institutional Background | 3 | 2 | 0 | 0 | Citron describes his formative motorcycle journey across Africa and his career trajectory from Beacon Group to Stone Point Capital. Seides facilitates with conversational prompts about Citron's background. | |
| The Commercial Case for Environmental and Social Investing | 3 | 4 | 0 | 0 | Citron articulates the commercial thesis behind ESG integration, framing environmental and social factors as additive analytical filters that reduce downside risk and enhance multiples. | |
| Mapping the Sustainable Manager Universe and Workforce Development | 4 | 4 | 1 | 2 | Seides challenges Citron's pitch by noting that his approach sounds driven strictly by investment returns rather than values-based impact. Citron harmonizes both elements by asserting that real-world impact requires commercial market mechanisms. | |
| Real Assets, Climate Priorities, and Distributed Energy | 3 | 4 | 0 | 0 | Citron discusses sector opportunities in real assets, workforce development with Zoma Capital, and distributed microgrids, arguing that climate solutions remain commercially compelling amidst macro disruptions. | |
| Manager Sourcing Strategies and Best-in-Class Criteria | 3 | 4 | 0 | 1 | Citron outlines Volery's outbound sourcing methodology and six criteria for selecting managers. Seides asks for a precise definition of 'best in class' and probes where new sustainable talent originates. | |
| Due Diligence Methodology and Underwriting Cash Flows | 3 | 4 | 0 | 0 | Citron details the private equity approach to underwriting asset manager cash flows, including management fees and carried interest across legacy and future fund vintages, before introducing the ALPHA framework. | |
| The ALPHA Impact Underwriting Framework | 2 | 5 | 0 | 0 | Citron provides an educational breakdown of the ALPHA impact underwriting acronym (Approach, Leadership, Presentation, Hypothesis, Application) while Seides listens attentively. | |
| Value Creation, Firm Development, and Capital Raising Support | 3 | 3 | 0 | 0 | Citron explains how Volery adds post-investment value to underlying GPs through operational institutionalization, storytelling enhancement, and strategic capital raising. | |
| The Institutional Allocator Landscape for Impact Strategies | 3 | 4 | 0 | 0 | Citron maps the institutional allocator landscape, contrasting traditional allocator due diligence with the thematic, specialized demands of impact-oriented LPs. | |
| Case Study: Scaling Renewable Resources Group (RRG) | 3 | 3 | 0 | 0 | Citron walks through the case study of backing Renewable Resources Group (RRG) and scaling their $900M commingled Sustainable Water Impact Fund. | |
| Volery's Institutional Partnerships and Market Positioning | 3 | 4 | 0 | 0 | Citron details Volery's partnerships with Ares Management and Zoma Capital, differentiating Volery's growth-equity impact GP model from large-cap GP stakes players like Dyal and Petershill. | |
| Mitigating Greenwashing and Navigating Private Market Governance | 4 | 4 | 0 | 2 | Seides presses Citron on why Volery focuses primarily on 'E' and 'S' rather than 'G'. Citron clarifies that private market control structures naturally embed governance protections, while public strategies face fierce distribution competition. | |
| Personal Reflections, Family Lessons, and Core Principles | 2 | 1 | 0 | 0 | Standard concluding questions cover personal pet peeves, intellectual hobbies, parental lessons on living without fear, and celebrating peers' success. |
Statements from this episode (14)
Stone Point Capital's first asset manager investment backed Todd Combs
“Stone Point's first investment in an asset manager was backing Todd Combs, who's now at Berkshire Hathaway.”
Citron: ESG integration lowers capital costs and expands valuation multiples
“And also companies with these considerations have shown to be able to reduce volatility and trade at higher multiples and access, you know, a lower cost of capital.”
Volery Capital makes private equity investments in impact asset managers
“We founded Volery to make private equity investments that generate positive social or environmental impact. And we quickly decided to focus on asset managers.”
Volery Capital mapped over 1,200 sustainable managers across global asset classes
“So we have so far mapped over 1200 managers across asset classes and geographies. And the, you know, the majority of those are not addressable for us as investment propositions, primarily because they're subscale or they operate in geographies that are outside…”
Volery Capital manages a workforce development mandate for Zoma Capital
“Is a mandate that we recently signed with a group called Zoma Capital in Denver, which is a terrific, long-standing Values oriented investor, which is to focus on, on workforce development.”
Microgrids and distributed power offer accretive value for data centers
“Those strategies, I think, will continue to both offer positive environmental impact, but also accretive propositions to the users, to, you know, data centers who are looking for that kind of local reliable power.”
Volery relies on outbound sourcing because impact GP stakes lack intermediaries
“Our sourcing strategy is almost completely outbound in our part of the market. No one's really intermediating These deals, we go out and create them”
Volery sets no minimum impact reporting bar for intentional managers
“And by the way, if they're very intentional, we can also help. With a lot of this thinking. So there's no minimum bar necessarily that we're looking to overcome.”
Many skilled impact fund managers struggle to articulate their value proposition
“We found that a lot of Managers are really good investors, but aren't necessarily as practiced in, in telling their stories and helping connect what they do and why it's meaningful to LPs and other constituents.”
High-net-worth investors helped prove the alpha-generating ability of impact strategies
“There are a lot of high net worth investors that have been very committed to impact and have helped lead the way and have helped prove the alpha generating ability of some of these investment strategies.”
Impact fundraising requires a rifle-shot approach to match thematic LP interests
“And so there are very committed LPs to space, but you have to be a little more rifle shot in connecting particular strategies to LPs with particular interests.”
Renewable Resources Group deployed $1B equity deal-by-deal before commingled funds
“They had, at the time, put a billion dollars of equity to work, but on a deal-by-deal basis.”