An investment firm that has made big bets on the US shale boom is soliciting investors for clean energy SPACs
- Riverstone Holdings, which made a fortune betting on American shale, is now pushing SPAC’s clean energy deal, according to a report in the Wall Street Journal.
- In total, Riverstone is said to earn up to $ 240 million from sponsoring four SPACs.
- But Riverstone’s 2006 renewable energy fund, the company’s first fund, lost 90% of its value to clients including California’s public retirement fund.
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Riverstone Holdings, which made a fortune betting on American shale, is now pushing $ 1.3 billion into clean energy SPAC deals, according to a report in the Wall Street Journal.
Riverstone has participated in four green SPACs to date – some of which are pending – including a hydrogen-powered truck company, an EV battery charging company, and another battery company that makes solid-state cells as an alternative to lithium-ion.
The investment firm’s most recent SPAC in August raised $ 315 million to bring a decarbonization-focused company public, though the hunt is still ongoing. All told, Riverstone is set to earn up to $ 240 million from sponsoring the four SPAC deals, NYU law professor Michael Ohlrogge told the Journal.
The odd thing about Riverstone’s recent green successes is that some of its most successful deals in the past were in oil and gas – and some of its previous clean energy deals ended in disaster.
Riverstone’s 2006 renewable energy fund, the company’s very first, lost 90% of its value to clients, including California’s public retirement plan, according to the Journal.
“You’d think a monkey couldn’t have lost that much money,” Riverstone co-founder David Leuschen said in a later interview.
Where Riverstone previously found gold is oil and gas wells, particularly in the wake of the shale boom. It took shares in risky Wildcat drills and loaned pipelines, which attracted billions in investor money. A 2016 SPAC investing in West Texas oil doubled its value.
But even these fossil fuel successes turned out to be somewhat illusory. The 2016 SPAC lost much of its profits when the slate market was hit by a glut of supply. Another SPAC that invested in Oklahoma mining filed for bankruptcy in 2019 before being liquidated, according to the Journal.
Ultimately, it is important for SPAC sponsors whether they can keep their share of the deal. In that regard, Riverstone has been an overwhelming success lately. The latest hydrogen-powered truck, SPAC, earned Riverstone a $ 56 million incentive package – more than eight times the cost of creating the deal.