| What the $1 trillion infrastructure bill means for clean energy PE investors Happy Tuesday, folks!
A UN-sponsored climate change report released yesterday estimated that the earth will heat up by more than 1.5 degrees Celsius by 2030 - a time threshold much sooner than expected. This equates to many more droughts, floods and fires in the coming years - a scientific byproduct of global warming. (IPCC Report here.) The $1 trillion infrastructure bill that's likely to pass this week proposes changes in systems that can possibly alleviate the situation. The $85 billion funding for electric vehicle charging infrastructure is a big one.
"If significant houses plug in their cars that’s a major demand for clean electrons," said Adam Bernstein, a managing director at North Sky Capital. In other words, a push for electric vehicles creates a major demand for clean sources for electricity –solar, wind, hydro and more. For Bernstein, who makes direct investments in sustainable infrastucture projects, the infrastructure bill "increases the opportunity set," he said. But Bernstein doesn't expect this bill to change what North Sky invests in - it just grows the market for renewable energy. Same goes for green infrastructure investor Scott Jacobs who's the cofounder of Generate Capital - a firm that raised $2 billion in July for sustainable infrastructure investments. "We will take input from the policy environment but won’t depend on this for our investment strategy," Jacobs said. For Generate Capital, the deal flow depends on the local communities and the customers and not the bill. What do you think about the infra bill and will it influence your investment playbook in any way?
Write to me at karishma.v@peimedia.com with your two cents, along with any other feedback, tips or gossip. Have a great week ahead!
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Also of note (may require subscriptions) Q&A with Thomas H. Lee Partners: Buyouts sat down with co-CEO Scott Sperling to talk about Thomas H. Lee’s strategy, opportunities and pitfalls in the post-covid recovery, and how tech acceleration and vaccine innovation will shape trends. Read it on Buyouts.
China's regulatory woes: Private equity firms are rethinking their strategies in China as a widening regulatory crackdown on some of the country’s hottest sectors forces investors to scout for bets in other industries that they hope will be less vulnerable to sudden policy changes, Reuters reports.
Hamilton Lane's deal structure: Hamilton Lane is seeing more of its funds move toward a deal-by-deal structure and away from the European waterfall structure, its vice-chairman has said. Read it on PEI.
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They said it “We always ask for transparent long term policy from the public sector if it's short term uncertain or opaque we can’t make any decisions …the best way to encourage private sector activity is to make clear long term energy [plans]." Scott Jacobs, chief executive and cofounder of Generate Capital, told PE Hub
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