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Leapfrogging the Energy Transition Synergy Capital Managing Partner Interview

Sudhir Maheshwari, Founder & Managing Partner, Synergy Capital

In this interview, Sudhir Maheshwari, Founder & Managing Partner at Synergy Capital, answers questions on Synergy Capital’s investment ethos, backing green change-makers and leveraging the World Climate Summit 2023 platform to inspire attendees to leapfrog into the next era.


What is your key message to the COP28 and the World Climate Summit stakeholders with respect to a more sustainable future?


There are two key messages that I want to share, and both derive from the famous quote attributed to JFK: “Ask not what your country can do for you, ask what you can do for your country”. I would however state that sustainability knows no borders. While many of the World’s problems require private-public partnerships and government policies, there is much that remains in our power.


The first message is that the private equity sector is a pivotal force for driving the transition to a sustainable future. We possess the capital, the expertise, and the influence necessary to fuel innovation and foster the development of sustainable industries. Our investments are increasingly directed towards companies that prioritize sustainability, reducing greenhouse gas emissions, and creating resilient infrastructures. As long-term investors, we take a proactive approach to risk management, recognizing that climate risk directly affects investment risk. By integrating climate considerations into our investment analysis and decision-making processes, we ensure that our portfolio is resilient.


The second message is that we are not merely financiers; we are partners in building a sustainable economy. Synergy Capital is organizing a workshop at the World Climate Summit in Dubai, where we have invited a new generation of business leaders from India circumventing conventional energy systems and supply chains. This workshop is titled “Leapfrogging the Energy Transition: Meet the green economy creators from India”.


We are providing a platform for these green champions to share their stories and offer inspiration for as many people as we can reach, to ask themselves “what they can do for the World” through innovation and green ambition.


How did you decide the topic of the workshop?

India hosts over 1/6 of the World's population and has the third-largest GDP on a PPP basis. It is a highly diverse country, a subcontinent, with 23 official languages undergoing a massive transformation. With such scale, there is no difference in the opportunities and challenges that India faces compared to the World at large. Therefore, the solutions that work in India can be implemented globally after localizing certain elements of the recipe.


India is also important in the context of the just transition. The country is creating the largest middle class by lifting people out of poverty. They should not be denied the opportunity for betterment. This is where the idea of leapfrogging is so important. In the same way that many countries went from no phones to wireless internet without developing a wired network, there are many advantages to starting with a clean slate.


I will not give any spoilers, so I encourage all of you to attend the workshop. Not only India is the key piece in the just transition, but also the lessons have global applicability. I am sure there will be no lack of gloomy forecasts shared during COP28. Instead, we want to offer a beacon of hope that it is possible to create sustainable value and that those who do will be rewarded.


How is Synergy Capital supporting the energy transition?

Synergy is a medium to long-term investor specialising in the industrial and infrastructure sectors. These are hard assets with long lives that mould communities around them. They are the anchors of development joined by enabling infrastructure that also falls under our investment mandate. Sustainability and resilience are at the crux of what we do from the investment generation phase, through ownership and all the way to our exit.


The challenges of the energy transition and biodiversity seem unsurmountable, measured in trillions of dollars and requiring a multifold increase in funding from historical levels. As a result, there are many important conversations about policy support, blended finance, private-public partnership and other models in which governments and the private sector should cooperate to achieve the Paris Agreement targets. A significant portion of government funding and policy support is going to disruptive and nescient technologies with the aim of accelerating their adoption rate. This leaves a gap for companies that have proven technologies that can deliver 50-80% of the benefits today so that the world can see higher early gains and the transition looks less like a cliff going from business as usual to net zero. How you get to the destination is as important as the end game itself.


These transitional technologies do not rely on government support. In fact, by being more efficient, they are more profitable than the status quo. In many cases, they are the direct manifestation of the maxim “necessity is the mother of invention”.


This is where Synergy Capital invests most of its resources, supporting change-makers with solid business models that require growth capital or companies that are fundamentally sound and yet are not living up to their potential.


We are not only investors but also strategic partners to the entrepreneurs we back. Synergy's cross-functional team combines deep finance, technical, and operating capabilities with an entrepreneurial mindset, embodying the guiding principle of "more than the sum of its parts". In many cases, we have been working together for over 20 years.


Our members have been responsible for assets producing 125 million tons per year of steel, 100 million tons of various types of mined products, 4GW of power, and other large operations in upstream and downstream energy, cement and infrastructure. On the investment side, Synergy's principals have successfully executed over $100 billion worth of M&A and capital markets transactions in the sectors where we invest.

 

About Synergy Capital

Synergy Capital is a specialist private equity manager investing across the capital structure in the industrials and infrastructure sectors globally. The firm is present in Dubai, India, Singapore and London. Synergy Capital focuses on critical sectors that generate strong positive human and economic impact, which are central to enabling the energy transition and the development of sustainable infrastructure and resilient traceable supply chains. Synergy Management (DIFC) Limited, as Manager of the Synergy Capital funds is regulated by the Dubai Financial Services Authority (DFSA).


Learn more about Synergy Capital: https://synergycapital.co.uk



About the Author

Sudhir Maheshwari founded Synergy Capital in 2015. Prior to that, he was a leading and integral part in the creation of ArcelorMittal, the world’s largest steel company. He served on the Group Management Board and acted as the Alternate Chairman of the Corporate Finance and Tax Committee leading Mergers and Acquisitions, Corporate Finance, Global tax, etc. He is credited with over US$100 billion of M&A and divestitures and over US$ 100 billion of diverse award-winning financing transactions. His professional career has exposed him to over 100 countries. He also managed Mittal Investments in oil and gas, cement and infrastructure where he structured equity investments of US$ 1.5 billion over US$ 8 billion assets under management.







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