Resilient Infrastructure: The Solution

AN INVESTMENT MODEL AND STRUCTURE MATCHED TO THE PROBLEM
Address climate change and other systemic risks
Integrated long-term asset management approach combines resilient infrastructure, systems coordination and technological advancement
Better Solution:
 
Replace venture capital and private equity fund model
 
with: 
Silicon-Valley style entrepreneurial company model

Provide large-scale institutional capital ( pensions, sovereign wealth funds, endowments, foundations) a manageable means to address systemic risk to portfolios based on climate change and other growing systemic risks.  As the December 2016 report of Task Force on Climate-related Financial Disclosures of the Financial Stability Board ("FSB") states: "Climate-related risks and the expected transition to a lower-carbon economy affect most economic sectors and industries."

 

Provide those same investors a more integrated approach to long-term asset management; particularly infrastructure ownership and management, that reduces risk and increases long-term returns from that infastructure. Do so through a structure that combines:

  • underlying holdings of yield-producing real and energy infrastructure assets;

  • active strategic management;

  • active incorporation of new technologies;

Provide a solution that eliminates the self-serving greed of the current private equity model but permits more risk-taking and shared rewards than the current direct investment model.

Replace traditional fund structure:

  • 10 year life commitment to capital and team;

  • 2/20 expense load;

  • no investment control;

  • mark to market,

  • little ability to address systemic risk,

 

with an entrepreneurial company model designed to address disruption:​

  • Permanent capital but with annual budget controls;

  • Evergreen, sustainable structure means access to capital when needed;

  • Board-level control (budget + hiring), but delegated investment authority over individual investments;

  • Owner-led Board manages hiring and firing of team; sets compensation structure and equity participation;

  • Team is recruited and retained based on market-based compensation; 

  • Team has equity participation but on a fully-aligned basis and only participates after owner's capital is returned;

  • Long-term liquidity through IPO of organization (patient long-term capital);

  • Current dividends from cash flows;

The Resourcient Solution:
  • Manage real assets, energy production and technology deployment in one consolidated holding structure

  • Choice and management of infrastructure geared toward future, not past

  • Overlay of management, technology, and business innovation

  • Use synergies to produce a result greater than sum of the parts