The Ledger
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Major automakers will fully transition to EVs by 2024, abandoning gas engines
“You've also seen major sustained investments by the automakers that are of a scope and scale that mean it's not clear when the curve ramps in the small amount, but four years from now, since people aren't doing new engine programs, they're switching to electri…”
Rigid project financiers waste time forcing management to fit structural limitations
“Some of the other investors who we respect a lot are stuck as project financiers or debt investors or equity investors. And so they'll spend a lot of time trying to convince a management team to adopt to their structural limitations. And we try to spend a lot …”
Lithium-ion battery costs are breaking below $100 per kilowatt-hour
“And that same thing makes a huge difference in mobility and transportation, where a battery that used to cost a thousand dollars a kilowatt hour is breaking a hundred dollars a kilowatt hour.”
Institutional endowments lack the expertise to execute in-house sustainable investing strategies
“With all due respect to some of the best endowments or investor groups out there, doing it internally is very complicated because you just don't have the expertise, or you see lots and lots of opportunities that are decently scaled but low return.”
Novel evergreen structures distract LPs from evaluating underlying strategy and returns
“Many of the structural solutions, evergreen or otherwise, have their own sets of complexities where you end up talking about why you're an evergreen fund instead of talking about what you do and why it's excess return generating.”
Subsidized philanthropic capital leaves sustainable startups unprepared for commercial market discipline
“We see some opportunities where someone has been subsidizing it out of a family office up to five million dollars, but you can't scale there. And so it's a very harsh reality for a company that's had a philanthropic capital partner that hasn't been economic. A…”
With 8% ROEs, oil supermajors are terrible bellwethers for climate investment opportunities
“This is a group of companies that have had terrible returns on capital. They earned, you know, eight percent ROEs last year. This year is going to be worse. Exxon's down 40% in the last five years. Why are we waiting for them to be the bellwether that determin…”
Applying value investing's loss-avoidance mindset guarantees failure in venture capital
“Where finding the thing that could be amazing is the opposite of making sure you don't lose money, right? Sort of venture capital portfolios and value investing portfolios have the opposite skews. I grew up learning that you'll do well if you never lose any mo…”
Commoditized solar projects yield 7% unlevered returns, missing Vision Ridge's hurdle
“It's wonderful for the world that solar projects can yield or get capitalized at a seven percent on levered return, but that also means the returns are too low for us.”
Underwriting construction-ready assets avoids binary permitting and interconnection risks
“Buying a project at construction ready is one of the places we like to invest because often construction risk is well known. We don't want to wait and know whether you'll get your interconnection or whether you'll get a permit or, you know, those things are mu…”
Fleet electrification is straightforward economics; autonomous vehicle timing is highly uncertain
“So the transition towards electrification is a really easy one. It's a mathematical equation, but one that requires knowledge and nuance. What are the ways to optimize your Power expenses. How is it more valuable to site your charging station on this side of t…”
Mega private equity funds cannot write $10M checks, requiring $200M minimums
“If you want to put a billion dollars of equity into something, it's very hard to start at 10. And so we're willing to start at 10 or write a hundred million dollar check and then go from there while they need to start with two or three hundred million dollars …”
Xcel Energy committed to aggressive decarbonization despite massive historical coal reliance
“Excel, which is my personal utility, but they went from being and are one of the dirtier utilities, because they have a lot of coal, to committing to an aggressive timeline to clean up.”
Lack of rapid scaling limits operating leverage despite decent project-level returns
“We had a couple of things in fund one where the financial opportunity didn't scale as quickly as we hoped. And so while interesting project level returns, you don't get the kind of operating leverage that is required to do really well.”
Vision Ridge owned the largest US EV fast-charging network outside of Tesla
“And we had owned the largest electric vehicle fast charging network here in the U S other than Tesla.”
Blackstone and mega private equity funds are pivoting into energy storage
“Going back to energy storage, in the last three months, we've seen both energy capital partners and Blackstone make big moves, and that's sort of saying, okay, what are we doing here? This is not oil and gas.”
Translating physical annual reports gave investors a distinct European edge in 1990s
“That was a period where we started by calling European companies up and asking them to mail us the annual report and translating it to English. And so sort of there was a window of advantage that's very, very different than there is now.”