Green investing is looking increasingly attractive to private equity, writes
Christoph Lueneburger, leader of Egon Zehnder International's Global Sustainability Practice, in a recent contribution to
The Deal. The need for sustainable energy infrastructure is massive and global, calling for new solutions to cater for energy demand in the future. "Private equity is emerging as one of the most efficient means for addressing the massive demand and for providing feasible solutions," notes Lueneburger. This is because private equity firms are experts at identifying new value propositions and determining how they can be achieved by bundling disparate links of the value chain (design, building, operation, maintenance, billing, load managing and hedging). Their success in going green, however, will largely be governed by their approach to recruiting talent. Leaders in this sector will not only need in-depth industry expertise, but must also be able to embrace operational and financial benchmarking and the rigors of working with both regulators and private equity investors. "Above all, they will emphatically reject the notion that an inherent conflict exists between being green and being profitable," concludes Lueneburger.
