Entrepreneurs for Impact (EFI) Podcast: Transcripts
#207:
Rahul Advani, CEO of SER Capital Partners — Private Equity Investing $50-$150M Per Climate Company. Ideal Management Team Qualities. Meditation Techniques for High Performance. Reframing ESG.
Podcast Introduction
Chris Wedding:
My guest today is Rahul Advani, CEO of SER Capital Partners. SER Capital is a middle market private equity investment firm dedicated to North American industrial sustainability. They manage $500 million in equity plus opportunities to harness lots more in debt for the right projects. Typical investments range from $50 million to $150 million per company. In addition to his role at SER, Rahul is a former private equity investor at Energy Capital Partners and a former board member at Sunnova, Nextlight, Firstlight, Sungevity, and many other growth-stage cleantech companies.
In this episode, you will learn four important takeaways. Number one, how they pick the right companies to invest in, and two or three cool examples of those companies. Number two, their perspective on ESG, aka responsible investment, and how it adds financial value to their portfolio companies.
Chris Wedding:
Number three, how they select the right management team and what it means to be pulled versus to push in those regards. Number four, why he practices transcendental meditation five times a week and tries to bring a gift in quotation marks to every personal encounter. Got link of course to SER Capital, to Rahul's background, as well as two books. One, Clean Disruption of Energy and Transportation: How Silicon Valley Will Make Oil, Nuclear, Natural Gas, Coal, Electric Utilities and Conventional Cars Obsolete by 2030, and the other one, Sapiens: A Brief History of Mankind. Please give Rahul and SER Capital a shout-out on LinkedIn, Slack, or X by sharing this podcast with your people.
All right, before we hop in, I've got a challenge and I guess an invitation for you all. First, the background: my goal is to empower 250,000 entrepreneurs, investors, and university students to tackle climate change through startups, finance, and personal growth. Is that enough? I don't know. It's a lot. Maybe it'll grow. Anyway, the podcast is one way to do that. To that end, the sector needs more inspiration, tools, and tips from CEOs and investors in this space. Conveniently, as you may guess, these folks are precisely my guests on this podcast. So here is the challenge.
If you and five of your friends rate, review, and follow this podcast on Apple and Spotify and share your efforts with me on LinkedIn or in response to my newsletter on Substack, I'll hop on Zoom and brainstorm a climate tech business or investment challenge or opportunity with you.
Now, is that a reward? Is that punishment? I don't know. There it is. This is the best way for new folks to learn from the CEOs and investors on this podcast. If the process is unclear, as it was to me, in the show notes, you will find a link explaining how to do this. I read every single review, so please tell all of us which guest insights you like the most. Thanks so much. Hope you enjoy it.
Podcast Interview
Chris Wedding:
Rahul Advani, Founder and CEO of SER Capital. Welcome to the podcast.
Rahul Advani:
Chris, great to see you. How are you doing? It looks like you're in a beautiful kind of winter cabin setup out where you are.
Chris Wedding:
Yes, the intention is for me to feel like I'm working in a mountain lodge somewhere in the North Carolina mountains. The reality is this 12 by 12, which, you know, all wood on the inside, is in our woods in Chapel Hill, but not in the mountains. And the result of three teenagers saying, all right, mom, dad, we're done sharing two rooms, expand somehow. I was like, all right, you take my office over there. I'll build something new, complete with hammock when things get tough, you know. Yes, the man cave HQ is in full effect.
Rahul Advani:
That's great. No, it looks cozy.
Chris Wedding:
It is. So, you know, Rahul, obviously you and I know this, but the listeners won't—this is, gosh, how many years might this be in the making? When do you think it was?
Rahul Advani:
Ten years. Maybe ten years. Eight to ten years in the making. Little kids running around Europe together.
Chris Wedding:
Yeah. I reflect back, and some listeners will have attended these Super Return investor conferences, and I think we met in Berlin, kind of the Marque conference, the heavy cheer, you know, VCP investors all around the world. And I laugh—or maybe we laugh—because you and I were on, was it the same stage or different stages? We’re on stages, and I thought, man, the other folks on the stage, they’re managing gazillions of dollars and so forth, on wonderful company budgets to be here. Somehow I’m up here as this boutique investment bank, long-haired PhD dude on my own, I mean through the company, but my own damn money, staying in some, you know, rinky-dink, not the main hotel, you know, three blocks away. Whatever. It led to our meeting. Rahul, how great.
Rahul Advani:
Yeah, it worked. You stood out. It was fantastic. You know, you drew out the entrepreneurial spirits that were in the room, I think.
Chris Wedding:
There we go. There you go. Yeah. London, Berlin, and Boston—good times. So Rahul, we talked before press and record a little bit about the topic on everyone's mind, which is AI. It's amazing. Oh wait, it's also a massive consumer of power and producer of GHG emissions, sometimes crushing the net-zero goals by the largest tech companies out there. Tell me more about how you all are thinking about the magnitude of the problem and what it may mean for your strategy.
Rahul Advani:
Yeah, it's a great question. It's a great place to start because if you look at the United States historically—let's say the last 10 years—we've actually done, even the past 20 years, a decently good job of decarbonizing our economy. A big part of that has been through renewable penetration, energy efficiency, and electrical demand staying pretty steady while our GDP has grown. We've had blips of demand growth on the grid beyond kind of ordinary organic growth that we might experience as a country, with the promise of perhaps cryptocurrencies, which, as I noted, is not the best use of load in my opinion. But also now with AI and continued use of electricity for data centers, right? These are massive centers that have a really high baseload requirement for electricity.
So they need not intermittent renewables or temporary peak storage power release. They need reliable 24/7 power, you know, 99.99999% of the time, because if you trip one of these learning models off, they actually need more electricity to restart and catch up.
Right. So, reliability is really important. And when you look at what's promised to come onto the grid, it is an enormous amount of electricity demand that we have not seen in terms of size, scale, and intensity before. And so now our strategy—since we are mid-market control-oriented investors focused on North America—is to bring capital to solutions that are here and now, providing compelling customer value propositions to players that might be looking at this. Now, we don't have assets or sites that we are selling today to data centers. We're not developing data centers, but we have one business—I'll just give you an example since this is where we started—that we took private. It's called Charah Solutions. And part of what they do is tear down legacy coal plants and remediate the sites, including all the legacy coal ash left on site. Right. They will actually take that and reuse a lot of it in the cement-making process. But in tearing down these sites—and we're doing one right now, actually doing a couple of these, one outside of Pittsburgh, one outside of Cleveland—there's a lot of demand now for these sites once they're fully remediated. They were mixed-use, residential, industrial customers. And now, all of a sudden, we have data centers as big buyers of this land that we've just remediated. That could be a park, it could be anything, but it has that valuable legacy interconnect.
When you look at where we are, it's hard to find neat spots to interconnect onto the grid. It's hard to get long-term, reliable, cheap power for many of these customers.
They're now starting to turn to nuclear to mitigate some utility processes. That's kind of where we fit in. We haven't yet been investing in modular nuclear solutions or similar technologies, but if we're talking about not being part of a utility solution necessarily—serving with distributed assets—there are different ways we can address some of that demand.
It's a big challenge for the country, and frankly, for the planet overall.
Chris Wedding:
The company you referenced—can you tell listeners the website? Pretty easy to find.
Rahul Advani:
Yeah, it's Charah, C-H-A-R-A-H Solutions. The company has been around since the 1980s. It's quite large—over 500 employees, hundreds of millions of dollars in revenue, pretty stable each year. The name comes from the founder, who named it after his two children, Charlie and Sarah, merged into Charah.
Chris Wedding:
Well, I'm very happy I asked you to indirectly spell the company by asking for the website. I was like, what the hell did he just say? Wait, super cool business, which I didn't know much about. Let's go back two levels and come back to the elevator pitch for exactly what SER does. You mentioned crypto not being a great use of that power—just maybe say more about that for a hot take.
Rahul Advani:
Well, look, I know that there are more efficient measures coming into cryptocurrency, but my understanding is that a lot of the value is predicated on the mining of that incremental coin.
And the mining of that coin is becoming more expensive, primarily because of electricity usage.
When I look at all the loads society has—trying to decarbonize—going into a crypto regime that increases electricity demand on the grid doesn't seem optimal. The best thing, if I were designing resources, would be to deprioritize crypto as an asset class, because there are better uses for electricity than energy-intensive currency applications.
Chris Wedding:
Yeah, I’m with you. Let's go back up to the top. So, high level, what is SER Capital?
Rahul Advani:
SER stands for Sustainable, Environmental, Renewable. We're an independent private equity firm, control-oriented. We like taking controlling stakes in businesses valued at $500 million of enterprise value or below, based in North America. These businesses broadly drive solutions for decarbonization and landfill waste reduction.
We typically write equity checks in the range of $50 to $150 million. Our strategy often involves acquiring businesses—taking them private, for example. We've acquired companies like Brightcore Energy, which does energy efficiency and underground geothermal loops.
We help them scale, develop new verticals, and serve building owners better across the northeast. We've also acquired Microgrid Networks, bringing capital and management to build out assets like EV charging stations in NYC, turning a dream into reality.
We aim to be transformative, adding value during ownership, aligning with management and LPs, with an exit in mind.
Our typical hold period is five to seven years, aiming for around 24-25% IRR, roughly doubling or approaching 2.5x multiple of invested capital over that horizon.
Chris Wedding:
Very helpful. Regarding value-add—some listeners might think, yeah, I've heard that before. What does it mean for you? Especially in control versus minority situations—examples of how you add value?
Rahul Advani:
Managing a board depends on circumstances. When things go well, control might not seem necessary, but when they don’t, having control helps. It allows us to work shoulder-to-shoulder with management, aligning on issues and solutions.
We have a team of 16, with five members with extensive operational experience, which is impressive. Over 25 years, we've created value both as investors and operators.
We focus on having the right management team—done seven investments, changed management twice to help take businesses to the next level, and instill a culture change.
We facilitate customer, supplier, and regulatory relationships. For example, in NYC, Con Edison is our off-taker, and we navigate billing issues to maximize margins. We also have a sustainability committee, meeting twice a year to share best practices and identify synergies among portfolio companies.
We recognize that market and policy landscapes change, so being opportunistic is key to creating value.
Chris Wedding:
Your operational experience makes you better investors. When deciding if management needs replacing, how do you decide? And what do incentive structures look like? Pick one—what comes to mind?
Rahul Advani:
Incentives vary, but a common approach is to allocate a management options pool worth about 10% of profits, or equivalent, at entry. Often, management invests alongside us, aligning interests.
It starts with having the right team. We prefer working with people we've known before because of trust and understanding their traits. If there's doubt, that's when you consider change.
In private equity, we pay an 8% preferred return to LPs. This creates urgency—if the management or CEO isn't fulfilling needs, it's an easy decision to replace them, especially if performance isn't meeting IRR targets.
We assess collaboration, proactivity, and whether the CEO pulls us forward or pushes us. We like being pulled, not pushed.
We want to hear bad news first, but also the plan to address it. Sharing analysis and a proposed solution shows leadership potential. The best leaders plan ahead and are flexible, always ready for contingencies.
Chris Wedding:
Good point. It reminds me of CEOs who say, "I don't want my team bringing problems; I want solutions." The best approach is to bring problems plus possible solutions.
Rahul Advani:
Young professionals often do analysis, but what sets future leaders apart is their ability to understand the essence of the problem and come back with a better answer. They plan, stay flexible, and communicate proactively.
Chris Wedding:
That’s a great trait. On your side, a moment of feedback from private equity—what makes a good principal versus someone still learning?
Rahul Advani:
Focus on growth. When I was younger, I wanted to work with smarter people I liked and who contributed meaningfully. I prefer smaller environments—they're more agile. It's important to understand your environment and strengths. Being proactive, chasing leads, and sharing ideas matter. Focus on gifts in interactions—listening, understanding, and building trust.
Chris Wedding:
For routines—any habits to stay healthy and focused?
Rahul Advani:
I swim three to five times a week; it’s calming. I meditate regularly—transcendental meditation, which I find fantastic. I schedule my meetings with color codes—internal, investor, potential deals—to get a visual of my day. I keep a to-do list to start each day organized.
Chris Wedding:
Is there a preferred meditation style?
Rahul Advani:
Yes, TM—transcendental meditation. It costs about $800 to get certified but offers lifelong tools. I do 20-minute sessions, usually three times a week, especially on weekdays. It helps clear my mind and stay disciplined.
The challenge is finding the discipline—sometimes I think, "Can I take 22.5 minutes now?" but I know it’s better to do it. I practice well on planes and when traveling, integrating it into routines.
Chris Wedding:
The Ray Dalio story—meditation contributing to success—is well-known. And there's a Buddhist parable: a busy professional asks a monk for 30-minute meditation; the monk says, “You need 60 minutes.” Humor aside, it’s about carving out that time because it’s essential for clarity and focus.
Rahul Advani:
Exactly. It’s about the value you get—like investing in your mind. If you’re going to socialize or drink, do it mindfully. Meditation is part of my weekend routine—my kids know I need my half hour to recharge.
Chris Wedding:
Last question—any books, podcasts, quotes for further learning?
Rahul Advani:
One book I recommend is Tony Seba's Clean Disruption. He wrote it about ten years ago, predicting a future where renewable energy makes the marginal electron free. While we’re not there yet, it’s an exciting vision. Also, Sapiens by Yuval Noah Harari—an expansive, well-written history that I think should be required reading. It covers many disciplines and broadens perspective.
Chris Wedding:
It’s humbling to think of the breadth needed to write such a book.
Rahul Advani:
Indeed.
Chris Wedding:
Rahul, it’s been great to hear your story—from our earliest conversations to where SER is today. Lots of room to grow the franchise.
Rahul Advani:
Thanks, Chris. One last thing—are you considering relabeling your ESG investing class?
Chris Wedding:
I joked in my newsletter—TBD. Maybe "transition investing" or "climate and impact." Because ESG is evolving, and the terminology might shift.
Rahul Advani:
Or “climate investing,” focusing on impact—beyond just climate, including education, healthcare, etc.
Chris Wedding:
Lots of terms—mission-related, responsible, sustainable finance. It might be fun to poll students next year to see what resonates.
Rahul Advani:
Great idea.
Chris Wedding:
Thanks for listening. If you're not tired of hanging out with me yet, join over 20,000 entrepreneurs, investors, and innovators subscribing to our 3-minute newsletter about changing the world through startups, finance, humor, and wisdom. Subscribe on Substack or at entrepreneursforimpact.com. Follow me on LinkedIn for more content on climate tech, impact investing, habits, and maybe too many lessons from Buddhism.
That's all, y’all. Make it a great week because, remember, it’s usually a choice. And P.S.—that’s not my kids’ favorite thing I say most mornings before school, but it’s still true. All right, take care.