Articles & Papers

PE/VC Trends Report: Industrial Edition

Spotlight on Energy Transition

PE & VC firms are focusing investment on energy transition


"The sweet spot for PE investment will be proven stable cash flow businesses that provide niche services or equipment for the new clean energy infrastructure. These businesses should be sufficiently niche so that they are protected from the big macro level changes behind the energy transition.  The new high interest rate environment and limited debt availability is challenging PE investors to become better operators of their businesses."

- Thomas Zay
Global Sector Leader, Energy
Managing Partner, United States



PE seeks to realize returns by remaking traditional energy companies


"There is a continued focus on the grey to green transition with large PE firms forming new funds focused on traditional energy companies who have net zero initiatives.  We have also seen small PE firms focus their energy investments on new technology to accelerate the energy transition including clear hydrogen for power plants, cleaner battery technologies, and Carbon sequestration."

- Kathy Pattillo
Managing Partner, United States



The way funds manage industrial portfolios is also in transition


"We can expect to witness not only a change in investment patterns but also a heightened focus on portfolio composition as the energy transition continues to evolve. The extremes of winners and losers will be more spread than historically with legacy investments.  Success will be determined by the ability to embrace uncertainty, adapt to changing dynamics, and identify companies that cater to the energy transition needs of multiple players within a given space. New entrants to these markets will have to consider how they contend with established well-functioning supply chains as they assess their investments. The demand for talent who can deliver in this new environment will be even more acute."

- Allan Marks
Managing Partner, Australia



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