5-Minute Interview with Navin Chauhan and Eduardo Monteiro, Victory Hill
Dr. Dorothy Kelso
Managing Director, SuperReturn | Chair of Trustees | Emerging Manager Champion
In this series of 5-minute interviews, I shine the spotlight on up-and-coming fund managers in private markets across the globe. All geographies. All strategies. All sectors.
Here's my conversation with Navin Chauhan and Eduardo Monteiro, Co-Founders and Managing Partners at Victory Hill Capital Partners LLP.
Quick facts about Victory Hill:
Q: What is Victory Hill’s investment strategy?
A: We invest in energy infrastructure development platforms and specialist middle-market energy players in the US and Europe to deliver their pipeline of assets and grow them into large scale businesses.
Q: Do you find that LPs put you in their PE bucket or their Infrastructure bucket?
A: This is an interesting question and one we face often.
We have designed a unique strategy that targets PE returns but which we believe has infrastructure characteristics. This strategy is founded on the strong fundamentals we see in the energy transition. Whilst we believe this should be in the PE bucket given that our capital is going into companies, the underlying value is being created by building out platforms / infrastructure.
Today, we believe this strategy almost falls in a grey area within the energy transition which we can see is being overlooked by traditional PE investors and infrastructure funds alike. PE investors are looking for the typical ‘PE growth playbook’ to create value, which is only part of the equation with this strategy, whereas infrastructure investors are overlooking investment opportunities because they only focus on asset portfolios and target a different return profile (usually lower).
Q: Sounds like an interesting gap in the market. What is the size of market opportunity?
A: Put simply, according to the International Energy Agency, we will need $5tn per year in sustainable energy investments from now until 2050 to reach net zero. That compares to only $3tn invested this year and $1tn per year invested in the past decade. Private equity growth has a crucial role to play to unlock all the capital that is required.
Q: The market opportunity sounds substantial. How did you come to focus on energy transition?
A: We wouldn’t exist without our sector knowledge. Identifying the opportunities that energy transition brings requires a lived experience in conventional and renewable energy markets globally. Once you know the challenges that the system operators and energy ministers face, you know where to find the right opportunity.
Q: How do you source deals?
A: Because we operate in an area that is overlooked by many others, even the large energy companies themselves, we have a robust deal origination capability. Suffice to say we have more attractive opportunities than we have capital to invest in today.
Q: You mentioned earlier that you have sector knowledge. What hands-on expertise do you have?
A: Collectively, our team has broad experience across all major financial disciplines and our CIOs have individually invested, advised and transacted on over $200bn of energy transactions globally, whilst collectively transacting on over $37bn of global sustainable energy transactions when working together prior to Victory Hill.
At Victory Hill, we launched our first fund by way of an IPO on the main market of London Stock Exchange. This is a listed, closed-end vehicle having many similar characteristics to a permanent capital vehicle. The fund takes a PE approach to sustainable energy infrastructure investing. Today it has 36 assets across the US, UK, Australia, Brazil, Spain, Portugal and Sweden and a multitude of technologies including solar, wind, battery storage, hydro, liquid storage and flexible power with carbon capture and reuse.
With each programme, we have operating partners in a JV arrangement that bring the expertise of over 100 people working on the ground.
Q: How are you building your team?
A: Three of the five co-founders spun out of Mizuho Financial Group. The five Managing Partners are Navin (Chief Commercial Officer), Eduardo (CIO), Richard Lum (CIO), Michael Egan (CFO) and Lawrence Bucknell (General Counsel). Eduardo, Richard and Lawrence have now been working together for over 10 years.
When establishing Victory Hill, we took an institutional approach and one we believed would allow the business to grow in an orderly fashion. Today, we have a team of 17 all based in London across our key verticals – Investments, Finance, Legal & Compliance, Business Development, Sustainability and Data Analytics.
Q: How do you see your business scaling?
A: As we focus on enabling the energy transition and building on our track record, strong origination capabilities and industry network, we see VH becoming a reference in the energy space.
With remarkably rapid transformation worldwide in this sector, market dislocations will continue to occur around the world, and with us backing great companies and investing in energy infrastructure to tackle these opportunities head on, we will ultimately deliver strong returns and continue to scale.
Q: What is your secret sauce?
A: From a business perspective, it is about the people who share the vision, the drive and the entrepreneurial spirit needed to implement change. We are not able to do this alone.
For our investments, it is to think about the end game (exit), first.
Q: What’s the biggest challenge you have had to overcome?
A: Establishing a new business and launching our first fund in the middle of Covid.
Q: What valuable lesson have you learnt that helps drive your approach?
A: Over time, we have learnt the significance of empathy in leadership. It is a critical component of effective leadership and has helped us to build trust, improve morale, increase motivation, and ultimately lead to success. It is the cornerstone of our approach.
Q: What advice would you both like to share with our readers?
A (Navin): I will keep it simple. Always be a good person.
A (Eduardo): I like the “always challenge: yourself, established views and old habits” mantra.
#privatequity #venturecapital #innovation #investing #entrepreneurship #energytransition #northamerica #europe
Founding Partner & Chief Commercial Officer at Victory Hill Capital Advisors LLP
6 个月Thank you so much for the feature and highlighting the work we are doing Dr. Dorothy Kelso!