NEW YORK - Former top UBS AG
investment banker Jeffrey McDermott and several other
Wall Street veterans have launched a boutique advisory firm
focused on alternative energy and "cleantech" companies.
The formation of Greentech Capital Advisors LLC represents
two of the biggest trends in financial services these days. The
New York firm becomes the latest in a legion of new niche firms
taking advantage of the Wall Street shakeout and training its
sights on fast-growing sectors of the economy.
McDermott told Reuters much of the credit goes to his 14-
year-old-son, Dylan, who expressed an interest in following his
father into investment banking. As McDermott described what he
thought would be an even better opportunity for his son --
renewable energy and earth-friendly technologies -- they agreed
he had described a pretty good business idea.
"I told him climate change is for real, that we'll use
energy differently, that there is more awareness of the
environment," McDermott recalled. "I decided I should look into
this myself."
Since that session more than a year ago, McDermott has
developed a business plan. This year he began recruiting the
first partners for what is for now a 13-person firm.
McDermott, who started his banking career 25 years ago, was
one of three global heads of UBS investment banking when he
quit early in 2007. In July that year he joined a start-up
private equity fund with turnaround expert Michael Heisley that
would invest in distressed industrial companies.
The new firm, announced during a period of record M&A
activity but rising default rates, intended to snap up debt
selling at distressed prices. But the credit crunch took hold
soon after and so the business was never launched.
McDermott expects Greentech can thrive by bringing together
people typically divided at other banks, though coordinating
talent from different teams and divisions could be difficult.
And though every bank has beefed up coverage of the dynamic
green corner of the economy, McDermott said the playing field
is fairly uncrowded.
"This is a very new sector. There is no (famed banker)
Frank Quattrone, no dominant figures. And as firms retrench,
these new sectors get less focus and attention," he said.
McDermott, who advised large industrial companies as a
banker, sees the alternative energy and clean tech space as
fertile ground for consolidation and expansion. The industry is
also still in its early stages, with most firms having market
values of less than $100 million.
"Over the next several years, there will be a lot of
capital raising and a lot of M&A," he said.
Joining McDermott are Robert Schultz, former chief
operating officer at Morgan Stanley's Morgan Stanley
Fund Services, who will serve as Greentech's COO. Timothy
Vincent, who leads the firm's project finance business, covered
infrastructure clients for Goldman Sachs Group Inc and
was formerly joint head of North America project finance for
BNP Paribas.
Also joining are Michael Molnar from Goldman, lead equity
research analyst on the U.S. alternative energy and coal
sectors, and Craig Wellen, a veteran power and utility sector
banker most recently working at Citigroup.
Andrew de Pass, founder of Citi's Sustainable Development
Investments business, joined Greentech to build a private
equity investing business.
(Editing by Gerald E. McCormick)
Copyright 2009 Reuters
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