Wall Street’s New Love Affair – Why Some of The World’s Smartest Investors Are Betting Millions On Clean Energy
BusinessWeek, August 14, 2006
By Emily Thornton and Adam Aston
You sense it from the waiting lists for Toyota Priuses. You see it on the faces of the solar-energy stalwarts who are suddenly being showered with attention. You read about it constantly in newspapers and magazines. And you hear it on TV and even at the movies. Warnings about global warming grow more dire by the day: Experts say Manhattan, Washington, and San Francisco will eventually be under water unless people start filling their tanks with corn squeezings and bolting solar panels to their roofs.
As troubling as the predictions are, even more urgent problems are weighing on the American psyche these days — namely the price of oil, which is surging past $75 a barrel, and the deteriorating Middle East situation. In liberal and conservative circles alike, energy independence is becoming a national imperative, and renewable energy is attracting an unprecedented array of groups. “We’re seeing an alignment of the environmental interests, automakers, the agricultural industry, the security and energy-independence proponents, even the evangelicals,” says billionaire venture capitalist L. John Doerr. “When did all those [interests] come together before?”
You know a cultural movement is real when the money men get on board. In just the past year a broad swath of financiers — venture capitalists, hedge funds, investment banks, public pension funds, and even stodgy insurers — have begun sinking billions of dollars into producers of ethanol, fuel cell superbatteries, microscopic bugs that turn glucose into plastic, environmentally friendly pesticides, anything that might tap into the green craze. Saving the planet, protecting America, doing God’s work, cynically exploiting a feel-good trend — call it what you will. Wall Street sees money to be made. When John V. Veech, a managing director at Lehman Brothers Inc., showed up at a renewable energy conference in June, he was amazed to see that it was standing room only. “If you went five years ago you’d see a lot of ponytails,” he says. “Now these conferences are packed with suits.”
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