- What is your investment strategy?
At LXI Capital, we focus on acquiring and managing high-quality renewable energy assets within the U.S., including solar, battery storage, hydro, renewable diesel, ethanol, renewable natural gas (RNG), and biogas projects. Our strategy is centered on long-term value creation, capital preservation, and stable cash flows. We prioritize assets with strong operational performance and long-term contracts, such as Power Purchase Agreements (PPAs), which ensure predictable revenue. We also place a strong emphasis on proactive risk management and operational excellence, leveraging advanced technology to drive efficiency. - What is your track record?
Our founder, Li, brings over two decades of experience in the energy sector, with a focus on investment management, asset management, risk management, derivatives, M&A, and post-acquisition integration. We have managed over 7GW of solar and battery storage projects across the U.S. and Canada. Li’s extensive expertise in commodity trading, FX, and interest rate swaps enables us to hedge risks associated with these assets. Our operational background includes process improvements of 30% to 3x in previous roles, and we apply the same principles to our renewable energy assets. - How do you manage risk?
We employ a comprehensive risk management framework, starting with standardized due diligence that evaluates market, regulatory, technical risks, and the operational performance of each asset. We focus on assets with long-term contracts like PPAs, which provide revenue stability, while utilizing hedging strategies to mitigate commodity price, FX, and interest rate risks. Additionally, we partner with property and casualty insurance experts to ensure adequate coverage, particularly for weather-related risks. On the consulting side, LXI Renewables provides risk profile assessments for some of the largest European and UK-based reinsurance companies, regarding U.S. renewable assets.
- What are your fees and compensation structure?
Our fee structure is transparent and aligned with our Limited Partners' (LPs) interests. We follow market-standard practices and provide turnkey compliance and reporting solutions. All fees are disclosed upfront, with no hidden charges. - What is your target return on investment (ROI)?
We aim to deliver risk-adjusted returns that outperform or, at a minimum, align with industry benchmarks for comparable assets in the market. - What is your investment horizon?
Our typical investment horizon ranges from 5 to 10 years, depending on the asset and prevailing market conditions. - How do you select and evaluate investment opportunities?
We leverage our extensive network within the renewable energy industry to identify promising projects. Our evaluation process includes key criteria such as site control, engineering studies, operational performance, projected production, and the quality of offtake agreements. - Who are your key team members, and what is their experience?
As of September 2024, Li serves as both Chief Investment Officer (CIO) and Chief Risk Officer (CRO). Our team includes experts in engineering, legal, and operations, located in the U.S., Pakistan, and India. We also maintain strategic partnerships with engineering firms, real estate companies, insurance providers, ESG consulting firms, CPA firms, and law firms across the U.S., UK, and Europe to ensure comprehensive technical support throughout the investment lifecycle. We expect to integrate some of the existing teams from acquired assets into our operations. Additionally, we plan to bring on more resources, particularly in capital raising, operations, risk management, and AI adoption as needed.
- What are the main risks and challenges in your investments?
Key risks include commodity price volatility, interest rate changes, FX risks, regulatory changes, technological advancements, and weather-related impacts. We mitigate these risks by focusing on projects with long-term contracts and diversifying across renewable energy assets and geographic regions. We also monitor emerging technologies that could disrupt the market and adjust our strategy accordingly. - Do you consider co-investment opportunities?
We welcome institutional investors and accredited individuals to co-invest with us. Additionally, we are open to serving as an outsourced CIO or CRO, executing mandates tailored to specific investment needs.