UNC Kenan-Flagler Business School


Alternative investments: Energy and infrastructure


UNC Kenan-FlaglerThe renewable energy industry is often the intersection of competing interests — political, corporate, engineering, and environmental.

While technologies like wind turbines and solar panels are hailed as the future of energy worldwide, renewable energy sources have not yet made a large impact on the consumption of traditional energy sources such as coal and oil.

The problem is that there is no real cost ascribed to pollution, said Mark Corigliano (MBA ‘01), a strategy and entrepreneurship professor at UNC Kenan-Flagler.

“Renewable energy is hampered by several different factors, the least of which is there is no value ascribed to any environmental benefit,” he said. “How do you put a dollar value on a landscape? It’s impossible to say.”

Corigliano spoke on a panel about energy and infrastructure at UNC Kenan-Flagler’s seventh annual Alternative Investments Conference on April 4. “Seeking Sustainable Yield” was the theme of the student-led event organized by the Private Equity Club, an MBA career organization. It brought together professionals, professors and students for a forum on industry trends in private equity, hedge funds and venture capital.

Noam Berk, partner at IOG Capital, said another reason renewable energy hasn’t impacted oil consumption is lagging storage capabilities.

“Solar and wind are not in grid parody anywhere. A lot of these aren’t implemented to be competitive,” he said. “Renewable energy will never be a real resource for us to rely on until the storage technology catches up.”

Panelists agreed that fracking — the controversial practice of extracting shale gas by drilling or injecting liquid into rock — is the United States’ best chance to reduce foreign dependency.

David Franklin, PowerOne Equity Partners, said activist pressure could pose a real threat to the practice. Critics of fracking argue that it can pollute water supplies, contaminate the environment and even cause seismic activity.

“I would not discount the ability of these types of groups to cancel fracking completely, in this country or in countries around the world.”

The discovery of new natural gas also will require an overhaul of current infrastructure, said Alex Darden, partner at EQT Partners.

“There’s a huge new resource that’s available. There’s a re-plumbing in the United States that needs to occur,” he said. “If you look at just the Northeast, you’ve got new pipelines that need to exist. We’ve got to figure out what to do with this stuff.”

Sponsors of the conference were Z Capital Partners, LLC, Purrington Moody Weil LLP, Royalty Exchange, SOLIC Capital Management, LLC, Plexus Capital, Laser Image Printing & Marketing, CFA Institute, Eurekahedge, HedgeCo.Net and the Private Equity Research Consortium (PERC).

The robust focus on private equity at UNC Kenan-Flagler extends from educational and career preparation for students – including the only student-run private equity fund at a top-tier business school – to the faculty’s research. Proceeds from the conference fund the Alternative Investment Fellowship, which assists selected UNC Kenan-Flagler MBA students gain summer internships with leading alternative investment firms.