You have been working in the private equity investing, complex financial restructuring, and legal advisory industries for nearly 3 decades now. How do you think the industry is different today from when you started your career?
When I started my career, and later when I co-founded Apollo, I put a heavy focus on the structuring of investments to manage investor risk; ESG investment themes were less of a focus at that time. As we did more of these transactions, we paved the way for the broader financial industry to replicate these models, and over-time, these structures have become more commonplace in the private equity universe. I started Pegasus Capital Advisors 25 years ago with the vision to change private equity investing by including social and environmental factors into the investment process. At that time, we were almost alone in doing this. Today, I believe that as financial engineering becomes more commoditized, a true and genuine understanding of ESG, and how to avoid consequences of greenwashing, has become a differentiator for us. It makes us a more attractive investment partner to companies seeking financing as well as a more savvy investor in the eyes of institutions looking to invest with us.
How does technology play a role in how the industry or Pegasus Capital Advisors operates?
Pegasus primarily invests in sustainability and health/wellness. Technology plays a key role in both areas. Today, there are technologies powered by solar power that create drinking water out of thin air as well as lighting systems that support our circadian rhythms while simultaneously safely purifying air and surfaces. Imagine a hotel powered entirely by renewable energy, producing its own drinking water from air, with guest rooms equipped with circadian lighting and sanitization systems, and with wellness areas applying the latest technologies to support your wellbeing. I believe this is not a distant future.
What is the one golden truth from the industry or piece of advice that you would like to share with young professionals?
I implore young individuals in the world of ESG investing to have a thorough, and informed understanding of the products, technologies and services in which they invest. These solutions should be holistic, actually solve the problems they intend to solve, and should provide a substantive impact to the world. In the industry today, many solutions can stand up temporarily upon marketing gimmicks. In my experience, these types of solutions rarely generate an attractive financial return and have the ability to poison the well through greenwashing. On the other hand, solutions, rooted in sound-science, have the ability to be truly transformative.
