SUSI Partners’ Marco van Daele at BAI Alternative Investor Conference 2023

In an interview with the German Association for Alternative Investments (BAI), SUSI Partners’ Co-CEO and Chief Investment Officer, Marco van Daele, elaborated on the key topics addressed during his presentation at the association’s flagship event, the BAI Alternative Investor Conference.

Selected statements from the interview are presented in English with minimal context added further below. You can watch the full interview in German with English subtitles HERE.

Elaborating on SUSI’s exclusive investment focus on energy transition infrastructure and the firm’s breakdown of the energy transition opportunity set into three pillars – producing clean energy, increasing energy efficiency, and enalbing the use of clean energy – van Daele emphasised the dynamism in the energy transition sector:

There are many themes that have become interesting for investors – which always have been interesting from a technological perspective, but are now also for investors. One exciting theme is energy storage. This is of the utmost importance since the increasing amount of intermittent renewable energies in the systems requires buffers, both at the grid level, but also at the level of the end customer.

The second big topic in recent times is heat – for buildings, but also process heat for industrial use. The production of this heat is still very often inefficient and/or reliant on fossil fuels, which needs to change.

Another topic is hydrogen. Hydrogen is not a sector per se, but first and foremost a molecule. So we have to be precise when takling about investing in hydrogen. Are we talking about the production of green hydrogen? Is it about the transport or the use of hydrogen? Are we talking about using hydrogen to store energy? There are a lot of potential applications and investment opportunities are emerging in the space.

Asked about the drive for innovation and the emergence of new business models in the energy service sector, van Daele comments:

What we have observed – with a view on the infrastructure investment space we are a part of – is that for too long, the end customer was not made a priority. We know it from companies that sell consumer products: the customer is king and the products are structured around the customer’s needs. In the energy sector, however, this was not and in some instances still is not the case. Energy as a product is quite abstract and therefore was never distributed with the customer in mind. Large utilities completely neglected the customer’s specific needs.

What happens now is that private companies, small companies, faster and more agile companies are offering customer-oriented solutions, which are not only sustainable, but also meet customers’ energy needs at lower cost while increasing energy security, thereby ensuring the viability of their business for the long term. At the same time, this creates a substantial need for capital, because ultimately, it’s always about hard assets that have to be built and installed and at SUSI, we are generally keen to finance these types of customer-centred solutions.

Asked what in his mind constitutes ‘sustainable’ investing’, van Daele explains:

We differentiate between three elements of sustainable investing. First, it’s about ‘what’ we invest in. At SUSI Partners, we only invest in energy transition infrastructure, but that does not make our investments sustainable per se yet.

The second element is the integration of ESG risk factors into the investment process. I often describe it as a special lens to look through. You look at the same company and adopt a new perspective to consider a broader set of factors, which – and this is important – have an impact on the investment’s risk and/or return.

The third element concerns the outcomes of an investment. Outcomes should of course include attractive risk-adjusted returns for investors but also non-financial benefits. In our case, every single investment has to avoid greenhouse gas emissions and we put a lot of effort into measuring that impact and reporting it to our investors to make sure it’s not merely a nice idea on the website, but something that is made transparent and verifiable.

The interview was conducted by Jörg Birkelbach.