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Neil.vtt

English

{{00:00:01}}
The past

{{00:00:07}}
20 years have been quite a ride.

{{00:00:10}}
Look, I'm a specialist
in the energy transition.

{{00:00:12}}
20 years ago, we did not call
it the energy transition.

{{00:00:16}}
Actually, I started the
business in investing for

{{00:00:18}}
Goldman Sachs way back in 2002.

{{00:00:21}}
We didn't know what to call it.

{{00:00:22}}
We called it alternative energy.

{{00:00:24}}
And then all of a sudden it became
clean energy, clean tech, climate, etc.

{{00:00:29}}
Our energy transition is now roughly,
in terms of total assets It's around

{{00:00:34}}
the planet in space, it's about
400 times the size when I started.

{{00:00:40}}
So that is quite a seismic shift.

{{00:00:42}}
Today, we're getting close, in the next
few years we'll reach roughly 50 percent

{{00:00:48}}
of the world's electricity generation mix
will be from low carbon sources, some of

{{00:00:53}}
that nuclear, and the rest of it, most
of it, will be other renewables, hydro

{{00:00:57}}
a little bit, but increasingly solar,
wind, and other types of renewables.

{{00:01:01}}
It is now.

{{00:01:03}}
It is a seismic shift, total
energy investment every year now.

{{00:01:08}}
Energy transition is double
that of fossil fuels.

{{00:01:11}}
So this energy transition is happening
and it's just been an amazing time

{{00:01:15}}
for me personally to be a pioneer
in the space over 20 years ago and

{{00:01:20}}
to see it evolve the way it has.

{{00:01:22}}
And so I consider it a privilege.

{{00:01:31}}
Clearly there's nervousness and there's
some dislocation because investors

{{00:01:35}}
don't yet know what's going to happen.

{{00:01:37}}
And my guess is that the transition team
has not completely formulated their plans.

{{00:01:41}}
They have certain things
they're going to do.

{{00:01:43}}
Here's what we do know.

{{00:01:45}}
Certainly when President Trump
comes into office, he's going

{{00:01:48}}
to sign a series of executive

{{00:01:56}}
Clean Energy, etc., but the entire
climate area, and he'll reverse most

{{00:02:03}}
of those, not all of those, and he's
going to also accelerate drilling.

{{00:02:07}}
And that we know that's baked in the
cake and everyone understands it.

{{00:02:11}}
When administrations change when one
president comes in and another leaves

{{00:02:16}}
from different parties, this is standard.

{{00:02:19}}
And that's not surprising.

{{00:02:22}}
What is, what we also have to understand
is that for Congress, although the

{{00:02:26}}
Republicans will be in control of
both houses, there's a range of

{{00:02:29}}
views around the energy transition.

{{00:02:33}}
For, if you look over the last
20 years, here's what you find.

{{00:02:37}}
All of the above, which includes fossil
fuels, nuclear, and low carbon energy,

{{00:02:42}}
has been the dominant theme, partly of
Democrats, but clearly of Republicans.

{{00:02:47}}
And you also find strong bipartisan
support in favor of renewable energy

{{00:02:53}}
tax credits, which is, which are the
main incentives that drive capital

{{00:02:57}}
formation in the United States.

{{00:02:59}}
I would predict that is
not going to change much.

{{00:03:03}}
It might change a little
bit around the edges.

{{00:03:05}}
But I think what President Trump
really wants is to see more

{{00:03:09}}
domestic manufacturing, even then
under the Biden administration.

{{00:03:14}}
which promoted democra promoted
domestic manufacturing incentives.

{{00:03:18}}
So I think we're gonna see
more of that, not less, but we

{{00:03:21}}
certainly have to wait and see.

{{00:03:28}}
Look, we focus on the energy
transition writ large.

{{00:03:31}}
We're not beholden to solar, or
wind, or batteries, hydro, etc.

{{00:03:39}}
We focus on this opportunity, and
so we're a mid sized firm and where

{{00:03:43}}
our focus is on value creation.

{{00:03:45}}
And we want to basically build or
create assets for institutional

{{00:03:48}}
investors, a large of what we do.

{{00:03:50}}
We also have a private credit
strategy where we deploy capital

{{00:03:53}}
into other people's projects.

{{00:03:55}}
But a lot of what we do is build projects
for institutional investors to invest in.

{{00:04:00}}
I believe that's going to maintain
a consistent growth pattern

{{00:04:04}}
over the next several years.

{{00:04:06}}
And the reason why is that
government policy moves around the

{{00:04:09}}
edges and moves private capital.

{{00:04:11}}
But the energy transition is
being driven by private capital.

{{00:04:15}}
Consumer preference is being
driven by low cost and dramatic

{{00:04:21}}
interest all around the world.

{{00:04:22}}
We're talking about a sector that
is now attracting 2 trillion in

{{00:04:27}}
capital globally and 300 billion
in the United States alone.

{{00:04:32}}
That may move up or down a little
bit, but I don't think it's

{{00:04:34}}
going to change dramatically.

{{00:04:41}}
Specialist managers, first of
all, a lot of different types of

{{00:04:44}}
investors invest in this space.

{{00:04:46}}
and has become almost an
asset class by itself.

{{00:04:50}}
What I think we do, as well as anyone, is
understand the current, basically what's

{{00:04:55}}
driving investment today, and the trends
that are gonna, that are gonna drive

{{00:04:59}}
investment in the next 5, 10, 15 years.

{{00:05:01}}
If you look back at our track record,
we were early adopters of solar

{{00:05:06}}
early adopters of residential solar
installations, and in a number of other

{{00:05:10}}
asset classes, early movers, where we can
capture the alpha of exponential growth

{{00:05:15}}
before other investors are seeing it,
because we're that close to, basically,

{{00:05:20}}
to the science, to the opinion shapers to
the early investors, the early adopters,

{{00:05:26}}
and so we understand the ecosystem at
a very deep level, and that enables us

{{00:05:30}}
to figure out how and what, not only
in what sector to deploy, but also what

{{00:05:36}}
strategy suits us and our investors in
the best possible way, and that can vary

{{00:05:41}}
very widely from subsector to subsector.

{{00:05:44}}
Microsoft Mechanics So we look at
value, we're basically capturing

{{00:05:48}}
outperformance at a very granular level,
and I think that gives us an advantage

{{00:05:53}}
over, over other investment firms.

{{00:06:00}}
So energy transition is so large
today that it's almost an asset

{{00:06:04}}
class, not an area of specialty.

{{00:06:06}}
And so what we do as GPs
and as direct investors, we

{{00:06:09}}
actually are unique, we do both.

{{00:06:11}}
We start companies, we back early
stage companies as direct investors,

{{00:06:15}}
And then we have particular strategies
in which we have funds that we form

{{00:06:19}}
around those particular themes.

{{00:06:22}}
And so what we're focused on is
understanding where is value and where

{{00:06:26}}
is risk at a very granular level.

{{00:06:29}}
We study this space exceptionally
closely and we look to mitigate as

{{00:06:32}}
much risk as possible and to make our
investors, help our investors enjoy the

{{00:06:38}}
upside of those investment specialties.

{{00:06:41}}
And so I think that's something that
we do very well, but resilience here

{{00:06:44}}
is actually Being able to to roll with
the punches a little bit, particularly

{{00:06:49}}
in a politically sensitive asset class
like us, and focus on the underlying

{{00:06:54}}
themes, the economics, the markets, that
drive adoption, and not be too dependent

{{00:07:00}}
upon policy or government handouts.

{{00:07:03}}
That is something that
we're very careful about.

{{00:07:05}}
I, in particular, encourage my
companies to not actually seek capital

{{00:07:11}}
from the government, But rather, to
take advantage of incentives that

{{00:07:14}}
are in the law, but not actually to
look at them as a source of capital.

{{00:07:18}}
And I think it's also a distinction in
the way that we think about investing

{{00:07:21}}
in this space compared to others.

Look, I'm a specialist
in the energy transition.

20 years ago, we did not call
it the energy transition.

Actually, I started the
business in investing for

And then all of a sudden it became
clean energy, clean tech, climate, etc.

Our energy transition is now roughly,
in terms of total assets It's around

the planet in space, it's about
400 times the size when I started.

Today, we're getting close, in the next
few years we'll reach roughly 50 percent

of the world's electricity generation mix
will be from low carbon sources, some of

that nuclear, and the rest of it, most
of it, will be other renewables, hydro

a little bit, but increasingly solar,
wind, and other types of renewables.

It is a seismic shift, total
energy investment every year now.

Energy transition is double
that of fossil fuels.

So this energy transition is happening
and it's just been an amazing time

for me personally to be a pioneer
in the space over 20 years ago and

Clearly there's nervousness and there's
some dislocation because investors

And my guess is that the transition team
has not completely formulated their plans.

They have certain things
they're going to do.

Certainly when President Trump
comes into office, he's going

Clean Energy, etc., but the entire
climate area, and he'll reverse most

of those, not all of those, and he's
going to also accelerate drilling.

And that we know that's baked in the
cake and everyone understands it.

When administrations change when one
president comes in and another leaves

from different parties, this is standard.

What is, what we also have to understand
is that for Congress, although the

Republicans will be in control of
both houses, there's a range of

For, if you look over the last
20 years, here's what you find.

All of the above, which includes fossil
fuels, nuclear, and low carbon energy,

has been the dominant theme, partly of
Democrats, but clearly of Republicans.

And you also find strong bipartisan
support in favor of renewable energy

tax credits, which is, which are the
main incentives that drive capital

I would predict that is
not going to change much.

It might change a little
bit around the edges.

But I think what President Trump
really wants is to see more

domestic manufacturing, even then
under the Biden administration.

which promoted democra promoted
domestic manufacturing incentives.

So I think we're gonna see
more of that, not less, but we

Look, we focus on the energy
transition writ large.

We're not beholden to solar, or
wind, or batteries, hydro, etc.

We focus on this opportunity, and
so we're a mid sized firm and where

And we want to basically build or
create assets for institutional

We also have a private credit
strategy where we deploy capital

But a lot of what we do is build projects
for institutional investors to invest in.

I believe that's going to maintain
a consistent growth pattern

And the reason why is that
government policy moves around the

But the energy transition is
being driven by private capital.

Consumer preference is being
driven by low cost and dramatic

We're talking about a sector that
is now attracting 2 trillion in

capital globally and 300 billion
in the United States alone.

That may move up or down a little
bit, but I don't think it's

Specialist managers, first of
all, a lot of different types of

and has become almost an
asset class by itself.

What I think we do, as well as anyone, is
understand the current, basically what's

driving investment today, and the trends
that are gonna, that are gonna drive

If you look back at our track record,
we were early adopters of solar

early adopters of residential solar
installations, and in a number of other

asset classes, early movers, where we can
capture the alpha of exponential growth

before other investors are seeing it,
because we're that close to, basically,

to the science, to the opinion shapers to
the early investors, the early adopters,

and so we understand the ecosystem at
a very deep level, and that enables us

to figure out how and what, not only
in what sector to deploy, but also what

strategy suits us and our investors in
the best possible way, and that can vary

Microsoft Mechanics So we look at
value, we're basically capturing

outperformance at a very granular level,
and I think that gives us an advantage

So energy transition is so large
today that it's almost an asset

And so what we do as GPs
and as direct investors, we

We start companies, we back early
stage companies as direct investors,

And then we have particular strategies
in which we have funds that we form

And so what we're focused on is
understanding where is value and where

We study this space exceptionally
closely and we look to mitigate as

Ready to invest smarter and more sustainably? Neil Auerbach, Founder and CEO of Hudson Sustainable Group, breaks down the strategies for success in sustainable investing. Speaking at SuperReturn North America, he shares insights into the evolving energy landscape, the sectors driving the energy transition, and the role of specialist managers in ensuring resilience.
