The interview below is part of an ongoing effort by McGuireWoods to profile women leaders in private equity (PE). To read previous profiles, click here. To recommend a woman for a future interview, email Amber Walsh at [email protected].Excelsior Energy Capital
Q: What attracted you to PE?
Anne Marie DeMent: I came to PE circuitously, via the industry of renewable energy. I was initially drawn to energy more generally when I was practicing law, as I found that energy industry transactions were rarely cookie-cutter. Every transaction was alive and required bespoke solutions, given the evolving political and social climates impacting energy decisions. From there, I had the fortune of moving to a renewable power company that the team helped bring public. I witnessed the pros and cons of a public vehicle — the convenience and value of liquidity and the difficulties with managing to quarterly earnings and public sentiment. Upon the sale of this public company, my now-partners and I launched Excelsior Energy Capital, a pure-play renewable energy infrastructure fund. We decided to go the PE route because we saw a need in the North American renewable market to connect institutional capital with a complex but high-in-demand asset class.
We have seen a tremendous appetite from institutional investors from all around the world for North American renewables, given the long-term contracted nature of the assets, the consistent rule of law and strong solar and wind resources throughout the region. However, given the tiered regulatory schemes (federal, state, local) and the various federal and state incentive programs for renewables, it is often difficult for large institutional investors to effectively compete and acquire these assets. The renewables market moves quickly, and sellers are looking for certainty of execution. The PE model allows Excelsior to be the on-the-ground experts for our institutional investors, moving efficiently, all while providing certainty of execution to sellers and financing partners.
Q: Why is it important for more women to pursue careers in PE?
AMD: As a starting point for this topic, I think it is critical to state a truism: Every woman and every man is unique. Consequently, any career discussions on women as a whole should be, in my opinion, ultimately geared toward creating opportunity for each person to be uniquely themselves, regardless of gender.
With that backdrop in place, when I think of women in PE, the first thing that comes to mind is that most of us have a shared experience of being the only woman in a sea of men in meetings. PE has been and continues to be very homogenous. Expanding the diversity of experience that drives this industry will, in my opinion, create safeguards against myopic group-think, and ultimately provide better value and returns to investors. Diversity is not just about gender, but gender is a good starting point for the discussion because roughly 50 percent of the world’s population is female, and the obvious lack of female presence in PE is an easy indicator that something is amiss in creating a space where diversity can flourish.
There is a natural tendency to gravitate toward like-minded, like-experienced individuals. And this is fine and good if you are talking about your closest friends who will always tell you that you are perfect after a massive failure. But when you are a PE fund, responsible for safeguarding your investors’ capital and creating alpha, homogenous thinking creates blind spots and a precarious sense of certainty built off mirrored validation. It is critical as fund managers that we persistently question our own assumptions. In my view, the best way to do this is to create a team that comes from all different walks of life, gender experiences, ethnicities and beyond. This often creates painful discussions as we grow outside of our individual sense of reality and preconceived notions of risk and reward. But the result is invaluable. Women, we need your voices in PE!
Q: Do you think there are any benefits to being a women in PE?
AMD: Typically, the conversation about being a woman in PE focuses around the downsides or challenges, but I like this question because I think there is always unique opportunity born out of challenges. I have found that being a minority in a male-dominated industry has opened the door to an incredible network of women who have shared experiences and are committed to helping create a world that is more attractive and conducive to women and other minority participants.
I recently became a member of PEWIN (Private Equity Women Investor Network), which is a group of women who are not only there to support each other in current business opportunities, but who are also looking to more broadly create a world where young women and girls have exposure to the world of PE and to carve pathways for them to follow, if they care to do so. Recently, one woman at a PEWIN event wondered what her life would have looked like if, as a young associate at a PE firm, she was exposed to women in decision-making roles in PE that were willing to share their experiences and what it means to be and thrive as a woman in the industry. The fact that there is now a critical mass of female decision-makers in PE who want to share their experiences with and sponsor the next generation is game-changing.
I also have been fortunate to be involved with Kayo, which is an organization that puts on women-focused conferences. Of important note is the PE conference held in the fall that attracts a wide range of limited partners (LPs) and general partners. The atmosphere I find at both PEWIN and Kayo events is similar. It is one of connectedness, authenticity and genuine desire to find ways to work together, lift each other up and pave the way for future generations of women and other minorities.
Q: What do you look for in partners in your business — partners on the LP side as well as partners when you make investments? Does gender diversity come into play?
ADM: We first and foremost look to find partners, whether on the LP or investment side, who think long term and view the partnership as a long game. The core strategy of our business is aggregating middle-market solar and wind assets with long-term contracted cash flows — ultimately building a portfolio that can be optimized during our fund’s hold period with intention to sell at premium at the time of exit. Critical to this strategy is surrounding ourselves and our assets with long-term partners. In any partnership, some days you are up, and some days you are down, but real partnership is not to grab the last cent when you are up and to, in turn, know your partner is not there to grab the last cent when you are down. The goal is to collectively all win together, and so we look for partners who have that long-term view and are looking to take the ride together.
As noted above, I and my co-founders view diversity as a critical component to ensuring healthy, well-rounded vetting of thoughts, assumptions and investments. This does not apply just to internal hiring, but also to our partnerships on the debt and tax equity side as well as in our LP base. We are fortunate to have incredible female leadership with many of our current partners, and we look to continue that trend.
To contact DeMent, email [email protected].