Investing in the Future: Rakesh Shankar, SOM ’09, Yale Clean Energy Conference speaker

Rakesh Shankar, SOM ’09, is a NextGen Partner at Antin Infrastructure Partners, where he leads investments in early-stage sustainable infrastructure through the firm’s NextGen Infrastructure Fund. With over two decades of experience in energy economics, investment banking, and clean energy finance, Shankar will speak on the Yale Clean Energy Conference keynote panel on “Investing in Clean Energy Innovation” on November 6 at 4:45 p.m.

 

Can you walk me through your journey into clean energy investing?

 

I was born and raised in the Middle East and came to the U.S. for college. After college, my first career was as an economist. I spent eight years as a macroeconomist for Moody’s Analytics, primarily covering energy economics, which is a lot of gas forecasting and covering some of the macro sectors.

Then I came to the Yale School of Management (SOM) in ’07 to make the transition from being an economist to getting into energy finance. I was a big believer in what was going on in energy and the energy transition back in the mid-2000s, in particular. There was a lot going on in terms of scaling renewables, especially in the U.S. SOM was a great school because it had a great mix between a strong energy program and a great finance program, both of which were important for me. I was co-leader of the Energy Club and the Private Equity Club while here at SOM.

After SOM, I went into investment banking at Morgan Stanley. I joined the Power and Renewables Group and spent almost 14 years as a power and renewables investment banker, spending most of my time in renewables, clean energy, and the energy transition but also broadly within the power sector.

Three years ago, I made the transition and joined Antin Infrastructure Partners. So, I started my third career from economist to banker to now investor. I joined Antin as a partner in an early-stage investment fund called the NextGen Infrastructure Fund, where we invest in earlier-stage infrastructure assets, a lot of which tend to be energy transition and energy investments.

 

You started your career in oil and gas. How did those early experiences influence your understanding of the energy landscape and what ultimately drew you toward renewables and clean energy investing?

 

I went to a liberal arts school as an undergrad, where I was an economics and international studies major. My interest in energy came a lot more through geopolitics and Middle East studies, which is where I spent a lot of my time. There was almost no way to study geopolitics or Middle East studies without thinking about energy and gas as the primary driver of several of these economies.

Regarding the transition to renewables, the more time you spend in energy, the writing is pretty much on the wall in terms of where the sector is going. It was a very natural transition towards saying oil and gas are very important and a critical part of the economy, but we’d like to spend time in sectors that would be a much bigger part of the future, versus what has been part of the past. That really drove my path toward the energy transition.

 

How did your time at SOM shape your perspective?

 

I could very honestly say I wouldn’t be here if it weren’t for my time at SOM. It was instrumental to me. It was a great mix from a professional perspective. Yale, in general, has such a strong energy community, both in terms of people who understand old energy and those who really want to drive the development of new energies.

If you try to do an energy MBA at most other schools, you won’t have those same voices from the people from the engineering school, environmental school, and law school, the way you do at Yale. You don’t get that same diversity of perspectives or additions to the dialogue. That holistic ecosystem view I got at Yale was phenomenal. I came in with a business and finance angle but learned so much more.

Socially, it was also phenomenal. Being a smaller school with strong interaction across the ecosystem made Yale stand apart. You really feel part of the whole network while focusing on what matters.

 

Considering current geopolitics, what would you say are the current trends in clean energy investing?

 

I’d say the first and most important thing is to look past cycles. You have to look at the macro trends. I’ve always believed that when people say oil and gas are dead, that’s not true. And when people say renewables are the only solution, that’s not true either.

Cyclical changes happen. The last decade has seen more volatility than in most of our lifetimes. But there are things you can and can’t control. Even though there’s been an ebbing and swinging away from some of these investments, the fundamental trends haven’t changed: renewables are cheaper than ever, often cheaper than fossil fuels. Fossil has gotten more expensive because the risks are more obvious now.

From both a customer and industry perspective, there’s a broad realization we must move toward a more sustainable future;, however you define it. That hasn’t gone away. The exact pathways and regulatory mechanisms evolve, but that’s how political systems work.

As an investor, it’s never easy because you make an investment at a point in time and then live with it. The most important thing is having perspective and flexibility, being able to move quickly as the world changes. The best management teams pivot and evolve rather than being dogmatic.

 

You’re speaking on a keynote about Investing in Clean Energy Innovation. What are you planning to discuss?

 

I’m very excited about the panel. There’s an exceptional set of speakers, and we all bring different perspectives.

Part of what I’ll discuss is that how you define clean energy matters a lot. You could look at clean power like solar and wind and say that’s clean energy. But to me, sustainability and the energy transition are far bigger topics. There’s incredible work happening in waste-to-value, recycling, and the circular economy. A lot is happening in decarbonizing buildings and transportation that goes beyond clean power.

It’s also about recognizing that when you’re trying to disrupt and create something new, there will be wins and losses. That’s true in every sector, not just clean energy. Our sector is capital-intensive, so success takes more time and money. But that’s the nature of the game, and I think the reward is worth it.

 

What do you see as the most exciting opportunities for innovation and investment in energy right now?

 

Even with all the tough times out there, there are so many sectors ripe for new investment. There’s a lot of focus on nuclear and geothermal. Both sectors make sense macro-wise, though micro challenges remain.

I’m also very excited about waste-to-value streams, such as capturing carbon and decarbonizing industrial processes like steel and cement. It’s not glamorous, but if done right, it can make a huge difference. I’m also excited about how tough times make people more creative.

Collaboration is key in our sector. Clean energy isn’t disruptive in the same way software is. You have to work with incumbents to scale real solutions. There are entrenched interests and regulations, so collaboration across the ecosystem is essential. It’s exciting to see strategic investors, new technology companies, EPC firms, and capital providers all coming together to build new ideas. Tough times have fostered that collaboration, which I think is fascinating.

Lastly, I’m very excited about the resurgence of American manufacturing. For a long time, we didn’t focus on making things here. One of the better outcomes of recent turmoil is the reinvigoration of domestic manufacturing and innovation in defense, aerospace, space, and critical manufacturing.

There’s a different mood here now. We can debate the downsides, but revitalizing such a critical part of the economy will pay rewards over time. I’m very excited to see the innovations that come from this resurgence in American manufacturing.