Funding the future


May 31, 2013

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Perhaps it should come as no surprise that former chief executive of Vestas, Johannes Poulsen, is reportedly planning a $600m wind turbine investment fund.

After all, for a man who started his career at a family run ice-cream factory just outside Copenhagen, before later switching to run a privately owned furniture business, his interest in clean energy – and more specifically, within wind – was by his own admission, more by accident than default.

Indeed, when he received the call from Vestas all the way back in 1987, the company was still making specialised farm machinery and had only recently tentatively started to explore the potential of commercial wind turbines.

At the time it was battling with that all too common challenge of over expansion and was in desperate need of some focus.

For Poulsen though – a natural businessman with a clear eye for an opportunity – he sensed the potential. And, when he took the reigns later that year; he quickly instilled that laser commercial focus.

Under his direction he sold off the farm machinery division, increased the size of the generators and improved the use of computer controls to radically improve the efficiency of the machines.

It was a smart move. And it formed the foundations of his fifteen-year tenure at the top, before he retired in 2002 at the age of 60.

Evidently though, old habits die hard and the Danish executive, now in his early seventies, looks set to capitalise on the potential of the wind, once again.

Reuniting a series of former Vestas executives – including the controversial figure of Henrik Nørremark, Vestas’ former chief financial officer – Poulsen has spotted an opportunity and will no doubt be a key figure in establishing the fund.

It’s a smart play, drawing on significant market experience and in the process, injecting a good mix of commercial understanding and technical know-how into a market that is notoriously hard to monitor and predict.

In short, and with the recent establishment of the likes of Greencoat Capital, no one is under any doubt that the timing for the new fund is good.

However, what industry insiders continue to question is his choice of companions to join him in tackling this critical new area of market growth.

Irrespective of the final outcome of the investigation currently being pursued by the Danish fraud squad, Henrik Nørremark left Vestas under a cloud. Fraud allegations surrounding the loss of €18.9m in what is believed to be a failed deal to buy Chinese turbines in India, continue to circulate. And the affair is unlikely to be concluded at anytime soon.

Vestas itself is currently basking in some (much-needed) positive news, with deals afoot in Jordan (117MW) and in Uruguay (90MW), and with shares last week rising to their highest level since 2011, as a result.

In short, nobody needs the headache of negative publicity – least of all Poulsen himself.

The fund remains a smart move. His selection of compatriots to join him in spearheading the initiative remains key. And the success or failure of the investment vehicle is as much dependent on the credibility of the team behind it, as it is on the wider state of the wind turbine market that Poulsen helped create.

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