Give us an overview of your career trajectory and the focus of your current role at Apollo.
I started my career in traditional power and utilities investment banking at UBS at a time when renewables were becoming all the rage. I then spent a year and a half at First Reserve, a private equity fund that invests across global energy, utility, and industrial systems. When I joined Apollo nearly 14 years ago, the firm was launching its first natural resources-focused strategy. Fast forward to today, and we have dedicated pools of capital as part of the Sustainable Investing Platform, which is focused on seizing on the opportunity to drive the energy transition and decarbonization of industry.
During my time working in the energy sector, I have seen multiple waves and trends in the energy transition. There is a growing consensus that the process to achieving a clean energy world is not a switch we can flip overnight—that’s why it’s crucial to invest in the transition from traditional technologies to new technologies. In my role specifically, I try to identify companies that provide services or manufacture components for the clean transition value chain.
What is Apollo’s Sustainable Investing Platform and how does it inform the company’s approach to the energy transition and sustainable investing?
We view the clean transition as a theme more than a sector, with relevance across asset classes including private equity, infrastructure, real estate, and credit strategies. To facilitate this thematic coverage, we decided to form an overarching initiative to enable regular coordination and exchange of ideas across the firm, from an origination, diligence, and deal management perspective.
Apollo’s Sustainable Investing Platform leverages our deep experience across asset classes to deploy capital in the key sectors driving the energy transition and decarbonization. The Platform acts as an umbrella that facilitates investments in businesses associated with sustainability, irrespective of asset class, encompassing over +120 investment professionals across the firm. Energy transition and sustainable investing are intrinsic to the Platform, and the hallmark of our investing strategy is providing competitive, flexible and patient financing across asset classes.
In the process of establishing the Platform in 2022, we began to intentionally track relevant deals across the firm. Up until this point, we didn’t have any targets focused on the sustainable investing theme. Our team had just been finding attractive opportunities – many of these just happened to be energy transition-focused. The exercise of analyzing previous deal flow in the space both cemented the need to coordinate our efforts, but also demonstrated the true breadth of the potential opportunity. Apollo seeks to deploy, commit or arrange $50 billion in clean energy and climate capital by 2027. In 2023, we deployed $10 billion towards that goal.
“We view the climate and energy transition as a theme more than a sector, with relevance across asset classes including private equity, real estate, and credit strategies.”
What makes you excited about investing in energy transition?
The scale and breadth of opportunity in the energy transition are often underestimated. There are many different types of investment that are needed to enable the energy transition, especially through the indirect value chain investments required to develop renewables or decarbonize industry—those second and third derivatives.
It’s estimated that the global energy transition may require annually, and at Apollo, we bucket these opportunities into five categories: Energy Transition (like renewable energy), Industrial Decarbonization, Sustainable Mobility, Sustainable Resource Use, and Sustainable Real Estate.
One of the biggest opportunities is in Industrial Decarbonization. Legacy industries have a massive footprint and cleaning them up presents a huge opportunity. In 2022, the industrial sector was the second largest contributor of greenhouse gas emissions, with direct and indirect emissions accounting for 30% of total U.S. greenhouse gas emissions.
“One of the biggest opportunities is in Industrial Decarbonization. Legacy industries have a massive footprint and cleaning them up presents a huge opportunity.”
Apollo-managed funds have invested in companies like TOPS (Total Operations and Production Service) that are electrifying the compression of natural gas, the most carbon intensive step in the natural gas value chain. TOPS is a leading provider of contract gas compression services for the Permian Basin. By leveraging the West Texas grid’s abundant renewable energy, TOPS is helping enable a lower carbon compression process. Admittedly, a company like TOPS may not be what initially comes to mind when thinking of the energy transition, but each TOPS compressor avoids nearly 2,000 metrics tons of CO2, helping gas end-users decarbonize their own footprint, at a time when industry is still dependent on natural gas.
How does Apollo think about taking technology risk when it comes to climate solutions?
As an alternative asset manager, Apollo’s investment approach tends to be technology agnostic. For instance, we know that energy storage is crucial to the energy transition if we want to scale intermittent renewable energy sources like solar or wind. The battery technology landscape, however, is constantly evolving. For us, there’s too much risk betting on a single solution.
That’s why Apollo-managed funds have invested in companies like FlexGen, an integration services provider with a software platform that allows energy storage owners to deploy various power market strategies and combine storage solutions with any form of generation. This modular solution gives our funds exposure to an important trend without having to taking specific technology risk.
How does Apollo integrate sustainability factors into its own decision-making process throughout the investment lifecycle?
Our sustainability program was founded 15 years ago. We consider core sustainability and operational efficiency metrics in addition to identifying which regulations, tailwinds, and headwinds are material to our funds’ investments.
During due diligence, we view sustainability factors like any other potentially material risk or opportunity. Looking through to exit, we work to articulate and quantify the holistic sustainability story to potential future buyers, which we believe is becoming more important in certain markets. Especially as we look to future disclosure-based regulatory regimes and how important climate and sustainability reporting is becoming, data collection and reporting capabilities at our funds’ portfolio companies can represent a value-driving upside for potential buyers.
When it comes to our own reporting, data from many of our private equity funds’ investments roll up into our Annual ESG Reporting Supplement, which complements our enterprise-level Annual Sustainability Report. Having over a decade’s worth of experience publishing our own reports, we have robust foundational elements in place, and leverage our dedicated sustainability reporting teams, which supports portfolio companies in tracking their own data to ease reporting.
“Looking through to exit, we work to articulate and quantify the holistic sustainability story to potential future buyers, which we believe is becoming more important in certain markets.”
In thinking about your career, how have you been able to advance inclusion in your time at Apollo?
I believe that inclusion is particularly crucial because it enables diverse voices at the table to feel comfortable sharing and that they will be heard. Apollo recognizes this and is committed to championing opportunity and cultivating an inclusive culture where everyone can thrive.
Eight years ago, we started an employee network called ‘Apollo Women Empower’ or AWE for short. AWE’s mission is to champion and support the hiring, engagement, development and retention of talented women to encourage long-term careers and provide advancement opportunities at Apollo, and to normalize the presence of women at all levels of seniority in our industry. AWE also seeks to make traditionally male-dominated events like golf outings more inclusive. It’s been great to watch the network scale geographically and grow in popularity, especially as the diversity of our teams have grown and expanded.
I’ve also been very involved with and currently serve on the Grants Council of the Apollo Opportunity Foundation (AOF). AOF provides grants to non-profit organizations to help expand opportunities in the communities in which we work and live. What is really unique about the Foundation is its focus on employee engagement. Every grantee that has been the recipient of an AOF grant was nominated by an Apollo employee, and grantees receives a monetary grant as well as a dedicated “deal team” to provide pro-bono assistance with budgeting, marketing, and programming, which further empowers our employees to use their unique skillsets to help make a difference.
“I believe that inclusion is particularly crucial because it enables diverse voices at the table to feel comfortable sharing and that they will be heard.”
