Key Takeaways | How Traditional Energy Funds are Shifting Toward Green Energy: A Conversation with Encap Investments and Quantum Energy Partners

By and on June 10, 2021

The energy market has undergone significant change in the past 12 months, with even more on the horizon. Our webinar series explores how these changes have shaped—and will continue to impact—the energy industry, including discussions of what’s to come.

Our latest webinar featured McDermott partners Edward Zaelke and Parker Lee, as well as Shawn Cumberland, Managing Partner of Energy Transition of EnCap Investments, and Alex Jackson, Director at Quantum Energy Partners.

Below are key takeaways from the webinar:

1. Although energy transition investment funds may have different focuses, they generally take an all-of-the-above approach, with respect to investing, in the various subsectors of the energy transition and are willing to invest in any technology, in any portion of the energy industry (except for highly capital intensive projects with binary risk profiles).

2. Similar to the approach for conventional oil and gas investments, investment funds are focused on investing in strong management teams with a successful track record, which is manifested either through a management team that already has an interesting business plan or a management team that can successfully implement the investment fund’s strategy for a new business.

3. Environmental, social and corporate governance (ESG) policies have become pervasive in all industries—especially within the energy industry—and must permeate all aspects of an investment fund’s strategy. Effective ESG policies and proper environmental stewardship have become licenses to operate within the energy industry and without them, operating companies and investment funds will have extremely limited ability to gain legitimate interest from potential investment partners.

4. When developing a relationship between an investment fund and a management team for a new investment, it is critical for both parties to ensure there are aligned interests and expectations between the two parties.

5. Investment funds see abundant opportunities within the energy transitions space and are bullish on those investments’ capability to satisfy energy demand over the next two to three decades but are also looking to achieve diversification to protect their limited partners from the cyclical nature of energy investment.

To access past webinars in this series and to begin receiving Energy updates, including invitations to the webinar series, please click here.

Edward ZaelkeEdward Zaelke
Edward (Ed) Zaelke is the head of the Firm’s Global Energy Project Finance group. He focuses his practice on project finance and private equity in renewable energy transactional matters. With more than 30 years of experience, he advises clients on all elements of alternative energy development and finance, including equity and debt financing, merger and acquisition transactions, equipment purchase and sale agreements, power purchase agreements, siting and other real property issues, governmental approvals, and engineering, procurement and construction (EPC) contracts. Read Ed Zaelke's full bio.


Parker A. LeeParker A. Lee
Parker A. Lee advises companies and investors in evaluating and executing transactions and commercial contracts in the energy and infrastructure industries. He represents clients in various domestic and international oil & gas, power, water, petrochemical and infrastructure M&A, project development and joint venture transactions.

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