Indranil is a graduate of Cambridge and MIT where he studied Natural Sciences and Chemical Engineering. He has spent his career at McKinsey, Bridgewater Associates, Mubadala Development Company, and Tiger Hill Capital, focusing on asset management and corporate strategy.
We discussed Indranil’s background, how he became interested in economic development, his new book, and initiatives that he is excited about.
Can you give an introduction to your background?
“I started off with a passion for technology, a passion for science. My graduate and undergraduate work was in chemical engineering and I did a PhD at MIT looking at polymers and how to control their properties in industrial situations. I’ve always been very interested in applied technology.”
“What I realized is that no matter how great a technology is, it doesn’t get very far if it’s not commercialized. I got interested in the commercialization of technology and business and economics in general in graduate school. After graduate school I joined McKinsey, working there for seven years and becoming an associate principal in their New York office.”
“The next step in my career was to join Bridgewater as a client advisor and strategist. My role was to raise capital for them. As one of the largest institutional investors in the world, I began to understand how global macroeconomics really works in markets. My interest was really in Private Equity, in investing in companies that could do something transformative.”
“I then got this amazing opportunity to work for Mubadala Development Company, the direct investment vehicle of the Abu Dhabi government. Here I helped shape a portfolio of investments into new industries and drove projects looking at the socio-economic impact of investments.”
“When I started doing this work, most people hadn’t heard of impact investing or double-bottom-line investing. Even in the financial industry it was relatively unknown, let alone among small businesses. I had a head start in understanding how bringing a combination of public and private capital to the table in partnership can help fund the large projects and development work that needs to be done.”
What led you to write Powering Prosperity?
“Since 2013 I have been running my own investment advisory firm in London, Tiger Hill Capital, and I've been helping other investors and project developers with their strategy, raise capital, and finding interesting ways to deploy capital. Around three years ago, I realized that the whole sustainable investing space was beginning to come of age. I saw there was a gap in the market to write a book about how the sustainable deployment of capital is central to driving a positive transition to an aging, zero-carbon, AI-augmented global economy and other key issues of our time.”
“There wasn’t a book out there that shows how social, political, and community issues must interplay with business and investment to achieve the sustainable development goals. Nor was there a book written by people with real cross-disciplinary experience who could explain how the global system can work better. And most importantly, there wasn’t a book that could tell you-- whatever your role in life, whether it's as an investor, business person, public servant, educator, etc--what you could do to make a positive contribution to system change.”
“This need for systems thinking has only heightened since I wrote the book. Many of the trends that I wrote about have been accelerated by the COVID pandemic, and we need to make sustainable changes more urgently than ever.”
If someone walked away from reading your book remembering only one thing - what would you want that to be?
“I would want them to remember what actions they can practically take. People must remember that we all play a portfolio of roles in society; we are not one thing. We could be a business leader, a parent, a member of a school board or community organization. Most of us invest money, even if it is only our pension funds. And we are all consumers spending thousands of dollars per year and we each have a political vote. We forget that all these roles in society give us multiple points of leverage. There are plenty of ways in which we have a professional, community, economic, or political impact and where our intervention can have a ripple effect on society overall.”
“We can choose to work for businesses and public organizations that promote inclusion and sustainability. We can instill these values in our kids, and insist on these standards in our schools and community organizations. We can also buy from and invest in companies which meet high standards of social and environmental impact. And we can support political leaders who address long-term structural issues rather than enacting short-term populist measures.”
How do you believe fund managers and businesses are working to solve issues of diversity and gender inclusivity?
“There is a lot more awareness now about closing the ethnic minority and gender gaps in business. I think that we will see a lot more capital being deployed in minority- and female-owned businesses. However, I think we need to go further than that. Myself and some colleagues will soon be announcing a new initiative to work with asset managers to drive greater inclusion in their portfolio companies, by put more minority people on the board, tapping into minority talent than they’ve done before, and procuring goods and services from minority-owned suppliers.”
What is the role of governments in markets?
“I see government as a catalyst and a creator of opportunity."
“I see government as a catalyst and a creator of opportunity. From an investing standpoint, it’s very important to distinguish between the risk factors of the public and private sectors. The government is uniquely good at making investments that are early stage, that are large scale, and that are long-term focused. Even though political leaders change, the civil servants beneath them stay the same and continue the initiatives from previous administrations.
“So, if government is uniquely good at these types of investments, the private sector is best on the mirror image. Companies are good at short-term investments, lower technology or development risk, and smaller scale.”
“When we put strong public and private sectors together, there lies the golden concoction. Government takes earlier stage risk, bigger capital risk, and a long-term view, and can take actions like subsidizing solar energy or funding research on new technologies that could someday become big job creators. An example of this is the DARPA initiative that led to the creation of the internet. Once a technology’s risk profile is lowered by public-sector involvement, corporate capital can come in to scale it up. That’s how government can be a catalyst and a creator of opportunity.”
Would you like to highlight an opportunity in solving problems related to climate change?
“Some of the big areas we can address are around agriculture. Whether it’s animals or growing crops, we release a lot of carbon in the farming process. By not practicing sustainable farming methods, we lose a lot of carbon from the soil to the atmosphere. Through a regenerative farming method, you can put carbon back into the soil. When you think of how much farmland is out in the world, you realise there is an immense potential for carbon capture via regenerative farming methods.”
How are the challenges of climate change connected to the challenges of wealth inequality?
“I see the issues of inequality and climate change as intertwined. Today, most places that produce hydrocarbons as a source of energy are developing. However, all the technology to extract the oil is owned and operated by developed countries. The developed world still owns the capital and IP to extract from the developing world. The developing world doesn’t benefit as much as the developed from this situation even though it owns the natural resources.”
“If you think of, in the future, where the sun shines the most, it is in countries near the equator, which are mostly developing. If you think of where wind is the strongest, it is offshore on remote islands, which tend to be less developed parts of any economy. The source of the future’s renewable energy will be in the developing world, but the technology for accessing the energy is coming from the developed world.”
“I hope that we don’t end up perpetuating the cycle of knowledge and capital ownership from the developed world exploiting the resources of the developing world.”
What areas of impact are you very excited about?
“Vertical farming is an example of a business that is not only great for the environment, but also helps solve the inequality problem. Vertical farming is indoor farming in climate regulated conditions. You can build a farm the size of many football fields and make the perfect growing conditions for your farm 24 hours a day, 365 days a year. If you do it on a big piece of land, in an area where people need jobs and economic activity, you can not only provide high quality products at a low operating cost, but also create hundreds of high-paying jobs in areas that need them.”
“You can do it anywhere. The technology is developed enough that your major concerns are instead development and permitting. You can do it just as easily in the desert in Africa as you can outside New York City. It is geographically agnostic which means that you can liberate farming from weather restrictions and create jobs in almost any community”
Any additional thoughts / ideas to share?
“You can’t rely on government to do everything, but you need government to do anything. The partnership between the public and private sector is the secret to getting things done.”