This week my friend called me from Madrid and invited me to spend some time there this summer. Ok, she didn’t invite me as much as remind me of my obligations as a friend. She pointed out how I haven’t even visited her apartment yet despite several years of invitation, so (under friendly coercion) I’ve booked my flights — LOL.
It’s not that I don’t like Spain or Spaniards, it’s just that I prefer to go to Italy. I relax in a friend’s apartment near the Spanish Steps in Rome and that’s been about as close to Spain as I get! However, I do know that Spain is vibrant, varied, worth exploring and the country where they make the delicious Turrón and other marzipan confections. Oh, and of course, it’s where Jamon Ibérico de Bellota has its origins.
Here’s a memory from my previous visit to Madrid: the view from the Museo del Prado.
There was a Tiziano exhibition then which was superb; Tiziano is Spanish for Titian, btw. They’d sourced and borrowed various pieces I’d seen in the likes of the Uffizi and the National Art Gallery as well as ones I hadn’t seen before from places like the Kromeriz, Archbishop’s Palace. The sum effect was that I wandered around the corridors spellbound by the various interpretations of Venus and Cupid amongst Titian’s other masterpieces. There were 65 pieces on show and it was the largest collection of Titians in one place since 1935. Moreover, it was the first time Spain had hosted an exhibition of the great painter.
Here’s my favorite Titian masterstroke, Venus of Urbino, whose natural home is the Uffizi:
The art was a pleasure and a reprieve from all the serious business. Other people like to drink or be couch potatoes to de-stress. I like to wander around art galleries and be amazed by human creativity and skill.
I was in Madrid for the European Wind Energy Conference. We’d just set up the corporate finance boutique (4 guys and I) and everyone agreed that it would be a good idea if I went to the conference to develop some professional relationships and attract some advisory mandates. This was at a time when renewable energies were not on many bankers’ radars. I seemed to be the only female banker, so people came up and spoke with me just out of sheer novelty!
They were pleasantly surprised that:
(1.) I understood their explanations on the engineering of how a wind turbine operates. In fact, I got up close and personal with a large Vestas propeller and each blade was three times my height.
(2.) I wasn’t one of the many female conference organizers or a waitress pouring the coffees.
(3.) I was a lot younger than most of the attendees.
Luckily, I did study Physics, Chemistry and Maths before a maths degree, my mother was an engineer and my father had introduced us to car engines when I was about 7 so………………….the technical aspects of turbines were easy to grasp.
A few weeks’ later, the Chair of the Structured Finance team at a top NYC law firm was lovely enough to send me a complimentary copy of Global Securitization and Structured Finance (usual RRP: US$150). He’d written a brilliant and concise piece on multi-patent securitization inside. After one of the conference’s break-out sessions, we’d had a really interesting conversation about Bowie bonds and securitizing IP for film slates by the major studios, and we mused over its cross-applicability into the securitization of wind farms.
I noted that the issue with the then lack of investment in turbine manufacturers was that most of them were engineers rather than economists, so they had less experience in building a business case and presenting their paths to profitability. Their concept of “efficiency” was all about the aeronautics of curvature that would capture, convert and channel the optimal wind power. The bankers’ concept of “efficiency” was whether working capital was being put to good use and when ploughback would take place.
See? There too is………….SEMANTICS. It’s difficult to twain the different concepts of “efficiency” unless you understand the motivations of and solutions offered by both sides.
Most of the renewable product manufacturers weren’t even aware they needed to know when their break-even point would be. Therefore, the bankers saw no business model (as defined by what’s taught at business school, in mgt consultancies and in banks) and so they didn’t risk the investment.
One of the key ways to resolve this, I argued, was to pool the patents and IPs of their engine designs and securitize the projected revenue streams from those. This wasn’t me being a “Young Turk” (aka clueless but full of bravura). There was a precedent. I was aware that a big telco had managed to do this with their 10,000+ technology patents and so I was fairly convinced it could be cross-applied to turbine patents. He appreciated my perspective because he was (at that time-point) a principal advocate for innovating the securitization of new asset classes.
Historically, securitization had been for fungibles and tangibles like people’s mortgages, telephone lines, corporate buildings, physical land, etc. The securitization of IP and patents was new territory, albeit a necessary one if green tech companies were going to be able to offer investors a reason to trust in a future with green economics at its core and to risk their money in the hope of some potential return.
We even talked broadly about the SPV structures that could work, to make it appealing to bankers and incentivize them to become more involved with the sector; both from a financing and an issuance advisory side. SPV stands for special purpose vehicles, btw.
As is evident now, bankers at the conference went away and thought quite hard about how to develop expertise in the sector and become more green. It seems to be working, so. It’s good to know that I contributed my little bit of catalysis to the conference and to the attendees as they did to me too.
On the final evening of the conference, the attendees who opted to went into the Madrid countryside for an exclusive dinner. Someone said it was a palace of the Spanish royal family but, to this day, I still don’t know the name of the venue. In the photograph, readers can see all our tables beautifully laid out for dinner around a fountain.
If anyone knows the name, please let me know via this blog! “Muchos gracias!” as the Spaniards say,
Since that conference, more and more banks have become active investors in and advisors to renewable energy companies. They finance the incubation of renewable technologies, provide strategic support and create services to facilitate the sector. This is a positive development, imo. It was great that former Vice President, Al Gore, made his Inconvenient Truth documentary in 2006 but if the bankers, tech manufacturers and engineering consultancies like ABB hadn’t started to convene and innovate financing structures a few years earlier…………………….
Renewables and the whole Green Movement would NOT exist or be making the progress in the way they are. It would still be in a cycle of consciousness by a certain demographic of campaigners rather than commercial, accessible and applicable to more people.
As much as bankers have been maligned over the last 18 months (and there’s no excuse for that handful of people who wrecked global economies and hit taxpayers hard), it’s also been too easy for non-insiders to overlook or be wholly ignorant about bankers’ contribution to the Green Movement and green implementation. They took seeds of awareness and paid for the tractors to furrow the land, for the pipes of irrigation, for the personnel qualified to cultivate those green seeds and for the construction of energy efficient and pollution-free alternatives to coal. Some of them are helping to shape the green future as much as others have contributed to decimating economic growth.
The better bankers are the reasons we now have wind farms all over Europe, green consumerism and eco-towns. They went into companies, helped formulate the business models and then went out to actively seek new investors or recommended either a NASDAQ/AIM floatation to attract them.
I know because my first transaction in our corpfin boutique was to raise GBP25 million for a California-based company that manufactures renewable Redox batteries. The type which act as back-up when there’s a massive power outage as the States experiences every few years.
I hope this post will contribute towards a better understanding that bankers can be the ones who finance and get green commitments off the ground, into shops + homes + main streets, and profitable. A junior analyst I met back then is now Ernst+Young’s UK Head of Renewables Energy, so “corporate-types” are committed to careers in green technologies and the greater greener good.
Also, when I wrote the GREENspot proposal as an entry into Google’s Project 10 to 100th competition (potentially a US$2 million funding prize), it wasn’t on a whim or to jump onto some bandwagon. It’s because there is a synch between the relevance to Android as a potential mobile socnet, the innovation, the financing, the technology and the mass applicability and potential traction of GREENspot which is clear, based on my experiences as a banker and as a technologist.
Anyway, apart from EWEC, I did manage to see a little bit of Madrid — if not as much as I did of Bilbao where I once went for a New Year’s Eve break. This limited exploration of Madrid included del Prado as well as frequenting a few good Spanish tapas bars and fish restaurants at night where I tasted local signature dishes like their version of a crème brulée, and the architecture, people and nature of the city.
I’m looking forward to catching up with my friend. Maybe as well as experiencing indigenous Madrid properly, we’ll go to the beach or up to the Spanish-French borders where her family owns a boutique hotel. We have a running joke where we believe the other person is the link to our future husbands, so I keep teasing her about how I feel “twinges and vibes” that this or other boyfriend is “THE ONE” for her — ha ha.
Reciprocally, if she ever does actually introduce me to the future Mr. Twain or is the connection to him, this would make my mother…….ECSTATIC. LOL.
The reality is that neither of us believes in the fairy tale where Prince Charming charges along in his trusty steed and sweeps us off our feet. Life’s a lot more interesting and complex than saccharine, lightweight candy floss.
Still, I’m a firm believer that what is meant to be will be and we move forwards towards it; just like green economics, connective-collaborative intelligence that constitutes the Global Brain and what I call “socially-voiced co-creation”.
Here’s to my friend and Madrid and more of the green stuff called growth………….
*********************
SPRING ROLLS
This morning I made my first-ever spring rolls. I’ll post the pictures and YouTube video later.
