Originally posted by Solutions with Sonya
Betsy Moszeter is the Chief Operating Officer of Green Alpha Advisors, LLC, an investment advisory firm based in Boulder, Colorado. It was my pleasure to chat with her about her path to impact investing, a favorite recent investment, and her favorite hike. Read on to see why she loves a wind blade manufacturer that is making an impact in areas outside of renewable energy as well.
Sonya Dreizler: I know you started in the traditional side of financial services, tell me a bit about that, and your path to impact investing.
Betsy Moszeter: I’d like to say that my transition to impact investing was one of brilliance, but it wasn’t. It was one of pure luck. After spending 15 years on the traditional side of asset management in both Boston and Washington, DC, I had grown tired of the east coast culture that requires extra-long days in the office; and I was tired of a long commute. Meanwhile, I had a friend in Boulder who always got to leave the office at 5pm and was out hiking by 5:15, while I was still in the office on the east coast at 7pm. Hiking is my favorite activity and I was ready to make a change, so in 2013 I sold my stake in my asset management firm, left DC, and moved to Boulder!
It turns out that Boulder is quite a hub of impact investing, second only to the Bay Area, as you know so well, Sonya! When I started looking for investing jobs in the Boulder area, I discovered impact investing. In my research process I was overwhelmed by the evidence about impact investing- how it can outperform over the long-term, the material impact it can have on the economy, and the myriad of options investors have. Once I knew the facts, transitioning to impact investing was a clear choice for me.
Sonya: Tell me about one of your favorite recent investments.
Betsy: One company I love is TPI Composites, Inc. They are the largest U.S.-based independent manufacturer of composite wind blades. They supply many of the world’s key wind turbine manufacturers, including Vestas, Nordex, and GE. They also manufacture other structures that need to be light and strong, like planes and electric vehicle buses.
Sonya: Before you tell me more about why you like TPI, let’s back up a step. Can you give me some general context about how you look at investments?
Betsy: At Green Alpha we seek to invest in companies providing solutions to our greatest risks. We know that some combination of a changing climate, resource degradation and scarcity, and/or widening inequality have played a causal role in prior downfalls of great civilizations. We look to invest in solutions to the risks that live under those three umbrella categories.
Sonya: So, I imagine the wind turbine blade manufacturing fits into that first category?
Betsy: All three, really. But let’s focus on the first today, for the sake of simplicity. With CO2, methane and other greenhouse gases posing risks to our environment and our economy, using wind energy capture instead of fossil fuel consumption is a key part of the investable solution to a rapidly changing climate.
TPI Composites (TPIC) is a technology leader in the strength, weight, quality, and performance of the blades that they manufacture. Environmentally, wind power is zero carbon and indefinitely renewable. Unlike fossil fuels that are completely consumed upon their first use, a turbine will continue to produce cheap, clean energy for decades. Wind is already among the cheapest, if not the cheapest means (this varies by state) of electricity generation. By supplying advanced materials, TPIC enables the production of less costly yet more efficient blades for wind turbines, thus making the ecological and economic advantages that much greater.
In addition to their wind turbine business, airline and electric vehicle bus companies have also engaged TPIC to provide structures and components, because their composites are so advanced. TPIC products help transportation companies to make vehicles both stronger and lighter weight, thereby increasing travel safety, and reducing vehicle weight, which in turn reduces both cost and energy requirements.
Sonya: I know your team evaluates company management just as much as the solution the company provides. Can you tell me what you looked at for TPIC?
Betsy: Yes, we like that TPIC is run by a management team with a track record of executing on their strategic and tactical plans. Over the past few years they have consistently grown revenues 25-30%, while using cash flow to both fund research and development to remain ahead of their peers on the IP front, and also to pay down debt. One of our pet peeves is when management teams use accelerating cash flows to buy back shares in their outstanding stock; share buybacks don’t increase shareholder value. We don’t see the TPI Composites leadership team doing this and we’re happy when we see a company’s management team using cashflow as a tool to benefit long-term shareholders, like we see in this instance.
Sonya: What interesting project are you working on now?
Betsy: As more money flows into impact investing vehicles in larger quantities, there are greater incentives for things like green-washing, pink-washing, and other factors that misrepresent how a given investment vehicle is constructed. I’m always working hard to educate advisors and clients how to better assess the investments they’re considering. The process of educating is very personal; everyone desires different information, has different objectives, and communicates their goals in different ways. Teaching is a constant learning process for me, and perpetually a current project!
Sonya: I like how your website tries to dial back the jargon and make investing more understandable.
Betsy: Thank you! But still, no one website or article can pretend to arm an advisor or investor with exactly what they’re looking to learn more about. Everyone’s questions, concerns and needs are unique to them, so I find it best to start with a conversation. I’m passionate about helping anyone who has the desire to learn and welcome a conversation to see how I might help.
Sonya: I’ll link your contact info on my site in case anyone would like to take you up on that offer! Last question, a fun one- what’s your favorite hike?
Betsy: So many favorites! I think Flat Top Mountain is my favorite. You start the hike pretty high up, but the trail is still green and tree-lined. As you go, you quickly get into scraggly, short trees, which soon disappear and you’re above tree line with views of the Great Divide and the rest of the Rockies for most of the hike. It’s dramatic and about as gorgeous as it gets.
Important Disclosures: At the time this article was published some Green Alpha client accounts held positions in TPI Composites (TPIC). Like all Green Alpha portfolio holdings, TPI Composites was selected with a long-term investment horizon in mind, to achieve specific impact and financial goals within each portfolio’s overall allocation. Nothing in this post should be construed to be investment advice or recommendation of what an investor should do today or at any point in the future.