YouSaid · the spoken record

William Orum

lines on the record: 73
first: 2023-03-13
most recent: 2023-03-13
sittings or episodes: 1
sources: podcast

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“This idea of look, the carbon emissions is happening at the company level. You can only do so much at the company level. As you've gone about investing the foundation capital, how have you decided when to invest directly so you can have more of an impact compared to, okay, we're going to invest in a manager who's doing something that we think we like, but then is again one step removed?”
2023-03-13 · Capital Allocators · William Orum – Mission-Aligned Allocation at Capricorn (Climate Solutions EP.2, Capital Allocators EP.301) · IDENTIFIED FROM THE TRANSCRIPT · source
“We're on a very good pathway there, but we still need to figure out how to do more around actually taking carbon out of the atmosphere and rolling it back to some degree. And I think there's a lot around nature-based solutions as well as technology-based solutions.”
2023-03-13 · Capital Allocators · William Orum – Mission-Aligned Allocation at Capricorn (Climate Solutions EP.2, Capital Allocators EP.301) · IDENTIFIED FROM THE TRANSCRIPT · source
“Agreement one and a half degree framework sees a pathway without using offsets and carbon sinks. And I know that they're controversial and it's not a perfect framework as of yet. But the truth is that as we wait for companies to decarbonize, and that will happen, and I think there are some green shoots around that, and as we wait for global power generation to shift to a more renewable standard, there's a lot that financial actors can do and asset owners around offsets. Frankly, it's one of the few things that an asset owner can do because it's companies that actually have to decarbonize. And of course, you can be activists and you can be supportive, but it's ultimately companies that have to do the hard work of decarbonizing their own operations. Similarly, you can fund and finance renewable power generation, which I think is critical.”
2023-03-13 · Capital Allocators · William Orum – Mission-Aligned Allocation at Capricorn (Climate Solutions EP.2, Capital Allocators EP.301) · IDENTIFIED FROM THE TRANSCRIPT · source
“Of innovation in transportation, mobility, power generation, storage. And then importantly, I think in the last few years, an increased recognition of the importance of industrial decarbonization, as well as the built environment. And I think there's a lot of technology innovations going into those areas. But this is ultimately about scale. So you can have all the innovation that you want. If you can't figure out how to mobilize the global capital markets to get those dollars out, you won't be able to address the challenge. And so that's been a big part of our focus around renewable infrastructure, regenerative agriculture, big dollar amounts where there's significant potential scale. And those things have to work together. I think the third piece is offsets. So no one that looks at the carbon challenge and the evolution of how do you keep within the parallel.”
2023-03-13 · Capital Allocators · William Orum – Mission-Aligned Allocation at Capricorn (Climate Solutions EP.2, Capital Allocators EP.301) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's a good question. So we benefit from having the full suite of tools. We have folks that do venture capital, but we also have a balance sheet that can absorb lower risk, lower returning asset-based investments, and understanding the connectivity between those two things, I think, is pretty critical to doing both very well. Our entire portfolio, we look at carbon baselining. So we calculate the emissions of our entire portfolio. And then from there, because we have committed to a net zero goal, we're really looking to decarbonize our portfolio, both through changes in what our underlying companies are doing, changes in asset allocation as needed, and then also doing offsets for any residual amount over the next 10 to 20 years. So as we think about the different levers, so the biggest is the venture side. So we're not going to address climate change and carbon emissions without various forms.”
2023-03-13 · Capital Allocators · William Orum – Mission-Aligned Allocation at Capricorn (Climate Solutions EP.2, Capital Allocators EP.301) · IDENTIFIED FROM THE TRANSCRIPT · source
“At the underlying asset level in terms of the type of strategies that we gravitate to within each of those big buckets of assets.”
2023-03-13 · Capital Allocators · William Orum – Mission-Aligned Allocation at Capricorn (Climate Solutions EP.2, Capital Allocators EP.301) · IDENTIFIED FROM THE TRANSCRIPT · source
“Oftentimes, when we describe our mission and our impact orientation, people think they're going to see this portfolio that looks completely unlike anything they've seen. And in practice, at an asset allocation level, and this is really the true north around how we invest, we have about 60% of the capital in various forms of equities, public and private, about 20% of the capital in real assets. Those real assets tend to be more contractual, more infrastructure-like just because of the nature of what we're doing, so not nearly as volatile as you might see in traditional commodities, about 10% in independent return forms of specialty financed, hedged, and then about 10% in liquid. When we look through it, and I look at a lot of peer institutions and try to understand how we compare or contrast to them at the highest level, our overall risk profile, our liquidity profile, it doesn't look terribly different. I think we start to look quite different.”
2023-03-13 · Capital Allocators · William Orum – Mission-Aligned Allocation at Capricorn (Climate Solutions EP.2, Capital Allocators EP.301) · IDENTIFIED FROM THE TRANSCRIPT · source
“Think every investment organization needs to have a reasonably clear identity. And I think it's okay to an investment organization to acknowledge whatever mental models they have. Everyone has biases and areas where they've made money and areas maybe where they haven't. And I think early on we probably weren't as aggressive in going more strongly towards climate and impact and maybe keeping a leg in some of the more traditional segments of the economy. We developed, I think, competitive advantages and networks that made us stronger and more able to compete and likely earn higher rates of return in these areas where frankly fewer people were active. But like all investment organizations, you don't want to deviate too far from everyone else. And so I think what we learned over time is that you continue to focus and devote resources into areas where you can develop.”
2023-03-13 · Capital Allocators · William Orum – Mission-Aligned Allocation at Capricorn (Climate Solutions EP.2, Capital Allocators EP.301) · IDENTIFIED FROM THE TRANSCRIPT · source
“Need for a decarbonization of the overall economy. So divestment in climate solution is, in my view, deal with the two pillars. But about 80% are going to fall somewhere in between. How do you decarbonize heavy industry? How do you decarbonize buildings and the built environment? Obviously, transportation. And so you need to really activate the entirety of the balance sheet to deal with the global economy, not just what I would call divestment and solely climate solutions. Although those are really big parts of it.”
2023-03-13 · Capital Allocators · William Orum – Mission-Aligned Allocation at Capricorn (Climate Solutions EP.2, Capital Allocators EP.301) · IDENTIFIED FROM THE TRANSCRIPT · source
“Certainly expanded over time. So if you go back to maybe the initial framework in the early 2000s, I think there was climate solutions and really innovation on the venture side. There was the starting of real asset deployment. So renewable power infrastructure. And in our view, those type of opportunities were really mispriced for the risk. It was a new asset class. And I think you were able to do that type of development and earn very high rates of return relative to the risk. But then within the public markets, really the only avenue for investment was development. And an immediate default to just excluding those extractive industries. And I think there's probably strong rationale for that. But I think as we've expanded over the last 20 years, I think there are opportunities across the breadth of industries. And frankly, there's a strong”
2023-03-13 · Capital Allocators · William Orum – Mission-Aligned Allocation at Capricorn (Climate Solutions EP.2, Capital Allocators EP.301) · IDENTIFIED FROM THE TRANSCRIPT · source
“As you've looked at, particularly with this lens of climate over these 20 years, How would you map out the landscape of different types of opportunities as you're trying to invest to impact climate solutions”
2023-03-13 · Capital Allocators · William Orum – Mission-Aligned Allocation at Capricorn (Climate Solutions EP.2, Capital Allocators EP.301) · IDENTIFIED FROM THE TRANSCRIPT · source
“Started there, and Jan led an investment in Tesla. And as you can imagine, Connectivity to different types of companies. But importantly, it wasn't just inventure. It was then how do you actually deploy some of these technologies at scale? So I think we've always benefited from the breadth of the portfolio. So everything from early stage venture to real assets and the deployment of capital into the real economy, if you will, and then everything in between.”
2023-03-13 · Capital Allocators · William Orum – Mission-Aligned Allocation at Capricorn (Climate Solutions EP.2, Capital Allocators EP.301) · IDENTIFIED FROM THE TRANSCRIPT · source
“So none of us came from an endowment. Stephen George and Yanya de Garaglu, who remains my partner today, came from different backgrounds than you would typically have if you were managing a large institutional pool of capital. And I think that was by design. As we thought about investing the capital, one, we ultimately are oriented towards growing the capital base over time, also supporting the payout as needed for Jeff Skull and the Skull Foundation and the other families and foundations we manage money for. But to do that in a highly diversified manner. And so we started investing across asset classes. And I think as we evolved, we've had a grounding and innovation and entrepreneurship. As we've thought about impact and innovation and specifically climate, I think it was pretty clear to us early on that technology and breakthroughs around entrepreneurship would be pretty critical to addressing the climate challenge.”
2023-03-13 · Capital Allocators · William Orum – Mission-Aligned Allocation at Capricorn (Climate Solutions EP.2, Capital Allocators EP.301) · IDENTIFIED FROM THE TRANSCRIPT · source
“Print on it. And our imprint was seeking out things in climate and in and around some of the various impact verticals where we thought they were undercapitalized, where we could earn high rates of return, or at least market rates of return, and which we thought we could have a competitive advantage relative to other market participants. About 60 to 70 percent of our portfolio is oriented towards strategies addressing climate change. About 20% is oriented towards financial inclusion and seeking different ways to get capital to undercapitalized entrepreneurs, businesses, segments of the economy, communities, et cetera. And then there's about 10%, which is generally broader portfolio instruments and things that we hold for purposes of managing the portfolio.”
2023-03-13 · Capital Allocators · William Orum – Mission-Aligned Allocation at Capricorn (Climate Solutions EP.2, Capital Allocators EP.301) · IDENTIFIED FROM THE TRANSCRIPT · source
“There is also a broad recognition that has applicability across a diversified portfolio for an asset owner. So it's not just one sleeve or one part of a portfolio. It has applicability across all asset classes, the entire risk spectrum, so private, public equity credit, and therefore it's just much more relevant to think about it holistically in a portfolio. And I think from an asset owner's standpoint, what we're seeing is that more and more they're also realizing that they have this endowment capital, and it can be a very powerful mechanism to amplify and support whatever their mission is. So they're much more open to using that balance sheet in a much more comprehensive way. We ultimately gravitated to a model that at very similar characteristics to the endowment model in terms of the breadth of asset classes, the level of diversification, long-term orientation, we like, I think any investment firm put our own improvement.”
2023-03-13 · Capital Allocators · William Orum – Mission-Aligned Allocation at Capricorn (Climate Solutions EP.2, Capital Allocators EP.301) · IDENTIFIED FROM THE TRANSCRIPT · source
“When we started the firm, the general consensus was endowment capital should be entirely distinct from the mission of an institution. Over time, firms like generation proved out or illustrated that you could introduce and integrate sustainability and these broader frameworks into an investment process, and it could be additive to risk-adjusted returns. At the same time, you had a number of foundations that were looking at carve-outs or using a specific sleeve of their foundation capital to look at opportunities in and around impact or climate. And I think what's exciting about where we are today is there's broad recognition that an issue like climate is both a systemic risk and opportunity in terms of long-term financial returns.”
2023-03-13 · Capital Allocators · William Orum – Mission-Aligned Allocation at Capricorn (Climate Solutions EP.2, Capital Allocators EP.301) · IDENTIFIED FROM THE TRANSCRIPT · source
“Documentaries like in Comedian Truth. They've done features like Green Book and Spotlight. And participant and School Foundation are unique in that they're looking for different ways to scale and reach a broader audience and look for those leverage points in philanthropic or media context. And in the case of Capricorn, we take a very similar approach, but we put it into an investment context. So where are there scale opportunities? Where are their points in the system where we can introduce different innovations and be well compensated for using that approach?”
2023-03-13 · Capital Allocators · William Orum – Mission-Aligned Allocation at Capricorn (Climate Solutions EP.2, Capital Allocators EP.301) · IDENTIFIED FROM THE TRANSCRIPT · source
“Are structured today, of course, it all started with the original partnership with Jeff Skoll and the Skoll Foundation. And Jeff and the foundation were really unique in that very early, they were open to the idea and wanted to use all of their resources, including their financial capital, to address big structural issues like climate. So we benefited quite a bit from their interest and their partnership, which in turn allowed us to explore some of these areas from an investment context. So in the case of Jeff, he was the founding president of eBay. He wrote the company's business plan. And after eBay, he's really committed himself, his capital, his time to looking for opportunities to promote transformational, social and environmental change. So he created the Skull Foundation. He created participant media, which is a diversified media company, which is intended to inspire and compel change with really high quality content.”
2023-03-13 · Capital Allocators · William Orum – Mission-Aligned Allocation at Capricorn (Climate Solutions EP.2, Capital Allocators EP.301) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, what is Capricorn? As we built the firm over time, we took that original framework and the goal of using the investment capital to amplify and support our client's mission. And we organized in three primary areas. So the first is that we have an OCIO in which we manage multi-asset class portfolios and we integrate climate and impact throughout. Second, we have a seating business in which we invest into emerging impact asset managers. And we really view this as critical to the overall objective, which is how can we create different channels and avenues to scale capital going to climate and other impact verticals. And then the third is we have an early stage, growth stage venture fund investing into clean tech businesses. And that's led by my colleagues Yanni De Garaglu and Depender Saluja. Each of these are different clearly, but they're connected in that they're different ways to mobilize capital and scale solutions oriented towards climate. So that's how we...”
2023-03-13 · Capital Allocators · William Orum – Mission-Aligned Allocation at Capricorn (Climate Solutions EP.2, Capital Allocators EP.301) · IDENTIFIED FROM THE TRANSCRIPT · source
“Time horizon. It was different in the sense that one, it was being formed. We were in the process of building out a portfolio. And two, and I think this is core to what we've been doing over the last 20 years, it had a different aspiration. The goal was to build a different type of investment firm that wouldn't just support our clients' capital needs for philanthropy or other purposes, but actually activate the capital while we were managing it. So seek out high rates of return, but do so in such a way as we were looking for opportunities around climate and different impact verticals.”
2023-03-13 · Capital Allocators · William Orum – Mission-Aligned Allocation at Capricorn (Climate Solutions EP.2, Capital Allocators EP.301) · IDENTIFIED FROM THE TRANSCRIPT · source
“In a short period of time. It wasn't hard for me to reflect and understand that with my background, I had virtually no purview or understanding of broader investing or capital market. So the one thing that I was looking for coming out of banking was something with the broadest remit, somewhere where I could really learn something and then figure out what I was going to do with my life. And so I'd been introduced to the endowment model and a few people that worked at various endowments. And that was really interesting to me. I didn't understand it clearly. I think I appreciated the fact that it was so broad and you could learn about all these different ways to deploy capital. And I found the mission of those endowments to be really compelling in many ways, working so closely on behalf of an institution. And that process led me to Capricorn. So Capricorn was just being formed in the early 2000s. And it had many of the characteristics of an endowment. So it had the breadth of activity. It had the long...”
2023-03-13 · Capital Allocators · William Orum – Mission-Aligned Allocation at Capricorn (Climate Solutions EP.2, Capital Allocators EP.301) · IDENTIFIED FROM THE TRANSCRIPT · source
“Tune in to private equity deals on your favorite podcast player to listen in on Wednesday. Please enjoy my conversation with Bill Orem in the second episode of Climate Solutions. Bill, great to see you. Great to see you. Thanks for having me. Why don't we do a quick bit on your background and we'll go from there. Sure. I tell people my background is easy because the vast majority of it's been spent at Capricorn. So I joined the firm about 20 years ago prior to Capricorn. I'd gone to Amherst College at a liberal arts education. I wanted to get some practical skills. And so I went into banking. And this was right during the tech bubble and then the subsequent crash. I worked out in Palo Alto and it was fortuitous for me, I suppose, that for someone that knew so little, I had about the first year to develop some basic skills. And then the market turned and we were understaffed. So I got quite a bit of deal experience.”
2023-03-13 · Capital Allocators · William Orum – Mission-Aligned Allocation at Capricorn (Climate Solutions EP.2, Capital Allocators EP.301) · IDENTIFIED FROM THE TRANSCRIPT · source
“Guest on the second episode of Climate Solutions is Bill Oram, partner at Capricorn Investment Group, one of the largest and longest standing mission-aligned investment organizations. Capricorn oversees $9 billion across three distinct but related investment strategies, an OCIO serving families and foundations, a seeding business that backs impact asset managers, and the Technology Impact Fund, a venture capital fund focused on clean technology and climate solutions. Bill joined Capricorn 20 years ago in the firm's infancy with the mission to deliver extraordinary investment results by leveraging market forces to scale solutions to global problems with a focus on the climate. Our conversation covers the establishment of an investment program to match Capricorn's mission, the universe of available investment opportunities to address climate solutions, and Capricorn's”
2023-03-13 · Capital Allocators · William Orum – Mission-Aligned Allocation at Capricorn (Climate Solutions EP.2, Capital Allocators EP.301) · IDENTIFIED FROM THE TRANSCRIPT · source