New investment firm eyes EV infrastructure

A new investment firm focuses on companies and investment platforms that will benefit from the transition to electric transportation and distributed power generation, in which energy is generated on or near the site where it will be used.

“You see a dearth of well-capitalized investment firms in this space,” said Dabo Horsfall, a former investment officer at Morgan Stanley Infrastructure Partners who launched Tensile Investments in 2018. “There aren’t enough firms willing to put in the legwork to create projects. We are creating opportunities and investing at the same time.”

The shift to electric transportation will require upgrades to the nation’s electricity infrastructure and utility rate structure. To smooth the transition – and ease the burden on the electrical grid – utilities and policy makers are considering a suite of options, including offering drivers off-peak charging incentives and “smart charging” programs.

“It is critical for electric utilities to plan for the coming electric transportation transition – technology will make this transition much easier,” Horsfall said.

“Just as more energy efficient equipment is reducing grid strain, advances in electric transportation technology – such as denser EV batteries and smart electric chargers – will help to reduce the amount of required grid infrastructure upgrades.”

Tensile’s strategy is to follow electric utility zones where rate structures and incentives are better suited for electric transportation.

For example, the firm is working with manufacturers of charging stations to figure out how owners of charging stations can run profitable businesses within the current rate structure for electricity.

Tensile is also investing in technologies that can aid in the distribution of power from charging stations to avoid pulling power from the grid during peak periods. (Renewable energy sources such as wind and solar are boosting opportunities for distributed energy systems that don’t place a burden on the existing infrastructure.)

The new firm draws on Horsfall’s extensive experience working with utilities, clean tech and private equity. He previously founded TriCap Investments, a clean energy investment firm focused on renewable off-grid power solutions for households and businesses in Sub-Saharan Africa and also worked as an investment professional for African Capital Alliance, a $1 billion private equity fund, where he established a platform for capturing and repurposing flared gas in the Niger Delta region of West Africa.

While at Morgan Stanley he managed several utility portfolio companies. He began his career as an IT professional at Quorum Business Solutions.

“I’ve been in finance for a while now,” Horsfall said, “but at the core I’m still more of an engineer, in the mode of problem solving and creating investing opportunities as a result.”

Tensile is currently working on a few pilots and by the end of 2019 hopes to have a few projects underway. The firm has formed several strategic alliances including one with a ride-share company Horsfall declined to name. He said Tensile will be using the ride-share company’s smart routing technology to enable better utilization of more expensive electric vehicles.

The firm is also talking to several original equipment manufacturers, primarily those that work on electric powertrain tech.

“No one is sure about when mass production or critical mass will hit,” Horsfall said, “but eventually transportation is going to be electric because it is a more efficient means of transportation, better for the environment and eventually is going to be cheaper in all scenarios.”