August 30, 2022 – On today’s podcast we welcome special guest, ClimateRock CEO Per Regnarsson. ClimateRock is a special purpose acquisition company that plans to acquire strategic renewable assets and enabling technologies with large decarbonization potential and strong financial history and prospects. 

On the show, Per discusses:

  • What specific types of opportunities the SPAC is looking at
  • His thoughts on the current market environment
  • The outlook for sustainable investing
  • Key segments of the sustainability sector that investors should have on their radar
  • And more

Welcome investors to The Absolute Return Podcast. Your source for stock market analysis, global macro musings and hedge fund investment strategies, your hosts, Julian Klymochko, and Michael Kesslering aim to bring you the knowledge and analysis you need to become a more intelligent and wealthier investor. This episode is brought to you by Accelerate Financial Technologies. Accelerate because performance matters. Find out more at

Julian Klymochko: Welcoming Per Regnarsson from ClimateRock all the way from London, UK. How are you Per? Thank you for coming on the show, so late tonight.

Per Regnarsson: Yeah, thank you. Thanks for having me on the show. I’m delighted and good time of the day.

Julian Klymochko: Yeah, and I hear it’s very hot in London as it is in North America these days, which plays very well to what you’re up to at ClimateRock in terms of sustainable investing, ESG and things of that nature. But prior to our discussion on what you’re up to at ClimateRock, I was wondering if we could talk a little bit about your early career background, including how you initially got into finance and your experience at various wall street firms across the pond.

Per Regnarsson: Yeah, thank you. No, I’m at Danish national. So, I started my banking career back in the eighties in Denmark. I spent about a year in New York in 1990, lot of things happening 89-90 in the financial sector. And I really got the appetites to not work out of Copenhagen in the long while but going back to one of the big financial centers. And so, coming back to Copenhagen and then later moving to London 94 with the objective of being in one of the big financial centers and in finance and I started my career as apprentice, so it, wasn’t sort of a late decision for me to go into banking. I kind of started there. And I grew up in an environment where in many ways things are only sort of, you know, appearing to you in hindsight what you learned and what you benefit from.

But having spent then sort of early nineties to sort of mid-nineties in the city of London with a few stints in New York at various institutions. It became you would say a career that was focused on the industries that available to renewable energy today. So, energy infrastructure, transportation, engineering companies. So late-stage technology development, but more the deployment of engineering technologies. And on the other side on the finance side, it was about, you know, how do you fund these things? So, everything from common equity to super senior debts, public, private’s structures, different types of investors and different deals. So, I think, you know, those years formed you know, certainly my, let’s call it approach to going into renewable energy back in 2006-2007. Bringing some of the structuring experience from the financial markets. Bringing the industry experience from some of the sectors that I covered over the years. And I would probably sort of point to four years at Moody’s, where I was in a position to dig deep into sectors as a research analyst. But I would also go back to my sort of early adulthood in Denmark. You’re working with and beating some individuals that were quite early movers in talking about greenhouse gas effects and talking about how you need to save your energy. And later on in life, learning from the Danish experience of being an early mover into renewable energy and Cleantech and energy efficiency,

Julian Klymochko: Certainly, renewable energy, being a huge topic in Europe these days is just given what’s going on with sourcing of natural gas from Russia, obviously.

Per Regnarsson: Yeah.

Julian Klymochko: Highly controversial there. And then even Germany now, refiring up those Coal fired power plants, which is obviously a huge concern from a pollution and climate change perspective, but that’s a whole another discussion. Now transitioning from wall street to entrepreneurship. You made that move a while back. So, can you describe how this transition was and was it your goal to always work, you know, within sustainability ESG and really trying to improve life for humans?

Per Regnarsson: I think it came due to the background with energy and transport markets and infrastructure and finance. It was clear to me that it was the sector that I think, it appealed to me, it made sense. It also made logical sense. So, you trying to do something for the better of society. But it wasn’t something I planned five years earlier [laugh] so you know, there’s been a couple of waves when it comes to Cleantech and renewables over the years and Europe did start quite early. In fact, so did parts of the U.S. as well if you go back to the nineties but I probably benefited from having a very strong relationship to people in the Scandinavian environment, either they were involved in hydroelectric power in Norway and Sweden and Finland, or they were involved in wind energy in Denmark that migrated into other countries, or Norway was also one of the early movers in solar energy with a lot of production data moving to Germany only to be taken over by China eventually.

So having seen how the trends of moving, you know, development and production and innovation from country to country. There was a lot of the things in the supply chain in the engineering sector, as well as the energy market that appealed to me. And I knew I had the background in structured finance to actually help deliver something. And I remember when I set up my first shop, it was really because I probably reached the point where I wanted to try out doing something without the safety net, so to speak, having formed divisions within a few banks and built them into some self-sustainable sectors of the bank. And then trying out how would be to do your thing. I always had your opinion that I needed to meet somebody with the idea, because I wasn’t the idea generator, but I could help to form and structure and move with an idea forward. So that kind of the role I took in entrepreneurship.

Michael Kesslering: Yeah, it’s really taking on the execution aspect, that makes sense. Given your background, is there any other advantages that your background in capital markets has provided you as you’ve transitioned to entrepreneurship and sustainability with ClimateRock?

Per Regnarsson: Well, I think it’s an interesting question, actually. When you look at what you bring to the table of entrepreneurs are often seen as being, you know, have no risk diversity, right? So, it’s all about the idea and speaking of the idea and the vision, which is great. But when you then bring in other people’s money, then there’s the element of where you need to look at the risk profile and manage the risk and trying to balance the growth and the ambitions and the excitement with that execution factor. So, I think actually having spent years in financial risk management helps you to build the platform perhaps better for an entrepreneur business. And yeah, I think that’s probably one of the things actually

Julian Klymochko: Now, your current project, ClimateRock is a Special Purpose Acquisition Company. It went public in New York in May of this year. What initially drew you to the blank check vehicle? They’ve been quite popular as of late?

Per Regnarsson: Well, first of all, whenever I come across projects or products, I’m always curious. And that’s down to my upbringing within investment banks, like JP Morgan, Merrill Lynch after my extended at Moody’s. And, you know, sometimes, you know, product innovation in the financial service sector has a bad connotation, but there’s also a lot of positive innovation. And with the blank check companies, I felt it was an opportunity when you were looking to set up investment structure where you knew you were going to make acquisitions to grow that investment company and if you look to other structures like [Inaudible 00:9:03] in the property market or yield codes in renewable energy markets. The SPAC structure appealed to me because it allowed you to be more, let’s call it heterogeneous on the portfolio or even consider a more vertically integrated business model than just buying assets. And which makes you more or less a fund manager, right? And I felt the opportunity was to create something given where the market is going. That was a bit more vertically integrated as a business where that could involve development and operation also services so different income stream that will contribute to a growth store. That’ll also see you through the cycles.

Julian Klymochko: In terms of ClimateRock mandate, or focus area, the sustainability, clean tech, ESG sectors, there’s myriad of different segments, within that different opportunities. What specific opportunities are you looking for within the umbrella of sustainability, clean tech? And in addition, what are some characteristics of the ideal target company?

Per Regnarsson: Well, I think we have a global market nowadays. I think a few years ago, Stanley, BlackRock came up saying that renewables have gone mainstream. And I think that’s very much the case, but there’s still different bottlenecks and different development stages and different regions of the world that are learning from each other. Europe is definitely a very mature, renewable in the markets. And until we had the issue with energy security related to Ukraine and Russia and the global gas markets and energy markets in general. It was also seen as being almost like a market where it, you know, as an institution investor, it did make any sense to invest in German renewables, for instance, that that has completely changed since we started our process, but even so, the maturity of the market also means that you have companies that are going back perhaps 20 years founded by individuals that are either, you know, looking for succession or simply looking for exit or looking to go from being regional, to being global.

So that offers many acquisition opportunities of established players. And then when you think about the nature of the IPO market these days, probably a SPAC structure, certainly what we are finding after listing, having raised the cap for strategy that that we and others you know, thing makes sense. There’s a lot of of opportunities as I just described amongst these types of companies. Ownership structures, looking for what’s next, looking to diversify from one sector to another, within renewables. So, that’s probably where you will see us being active.

Julian Klymochko: Yeah, no doubt. You’ve been very active lately in terms of your search for the ideal company to merge with, the SPAC. Was wondering, what are your thoughts on the current market environment? Obviously, it seems highly competitive, particularly in specs, in addition, the wider macroeconomic environment, rising interest rates of volatile equity markets, tougher financing conditions. What are your thoughts on how things are looking from your perspective?

Per Regnarsson: Well, I think you’re absolutely right. The macros are, you know, been uncertain to say the least. The trends with interest rates and also in terms of you know, the perception of SPACs in the markets and the recent activity in SPAC markets when it comes to these SPACs. I think we’re seeing a growing number of SPACs that are asking for extensions and you know, in general, you could say that the market therefore is negative. Having said that when it comes to investment strategy within ESG renewable energy in a climate if you want, where we are dealing with energy security and energy transition, I certainly see us and the feedback I’m having is that we are in a good spot.

Next to that, we decided to go for relatively small IPO, you would say, so obviously 75 got close to 80 with the allotment. That also means that for us redemption has less of an impact on the early financing we want to achieve from the combination. And I think that’s back to the idea of trying to de-risk what you’re doing to improve success. And we set out to do this on a basis of creating an investment company for the long run, not just to create a de-SPAC back and then you know, wash our hands, and walk away, right. So, I think, you know, we have created a structure where we believe execution is more likely to happen, and we have de-risked by yeah. Also looking at ways where we can come in with, we have additional source of funding. So, were not a tech spec. We are actually looking to buy cash flow, which allows us to combine you know, small pipe to make off for redemptions with some debt finance that you can put on conservatively but will be serviced by the cash flow of the online business. I think that’s the way to create something that in the current environment is not necessarily too aggressive on the de-SPAC itself but can certainly be an attractive growth start going forward with multiple acquisition opportunities.

Julian Klymochko: Yeah, it’s really good insight in terms of the focus being on EBITDA cash flow, perhaps free cash flow of the underlying asset that you’re pursuing. And it seems like that’s a very smart decision these days because those who invested or merged with target companies that didn’t have revenue EBITDA profit for years and years out, those have certainly been suffering in the market with the downdraft in these hyper growth speculative entities. But with that, what other important characteristics of a SPAC sponsor do you think it’s important to be successful in the current challenging market environment?

Per Regnarsson: One of the things I find is that expect to you know, prepare yourself for the SPAC IPO and the de-SPAC as if you [Inaudible 00:15:43] left the company. Don’t think that you have too many loopholes, right? Just expect to deliver what you have to deliver so that you satisfy the regulators. Because ultimately, it’s not about them. It’s about the investors. You want to give them comfort that you are operating the business the way you should be operating the business. And then you just make sure that you are prepared to take the time and your team, the right expertise to do it. You asked before about, you know, why the SPAC? Why blank check company? It made sense because it was a fast way to go to market, but you know, even if it’s faster, you still need to prepare yourself. You still need to deliver.

Julian Klymochko: And with that said, you’ve been up and trading in the market, having your search. I’m sure you’re evaluating a ton of opportunities out there. What are some key learnings thus far from your experience as a SPAC sponsor ClimateRock?

Per Regnarsson: Well, in terms of positive and negative. I think it’s relatively positive from a market point of view. I don’t see us having had any particular issues with [Inaudible 00:16:54] coming in to all the SPAC. I think we are seeing some good appetite. Hoping that others or some will actually come in a pipe to add to their stake. Keeping, you know, our name in the markets also through discussions like this. And we actually think we have a story to tell. We think we have something that is slightly different. You don’t see any, you don’t see many pure play, renewable energy SPACs. You see a lot of tech SPACs, you see mobility SPACs, you see diversification within the climate change market, which is great if we’re trying to address climate change. But, from selfish point of view, I think we have a carve out and you know, with a team that’s predominantly based in Europe. I also think that we are bringing perhaps assets from a different region to the NASDAQ market once we de-SPAC

Julian Klymochko: Now, I did want to get into the weeds a bit on the sector that you focus on sustainable investing, clean tech, renewable energy, because it entails so many different segments that have their own nuances, tailwinds headwinds. For example, nuclear energy to me is always seemed like a no brainer, but governments and regulators just can seem to wrap their heads around it. And then you’re saying quite a bit of growth and wind and solar and battery technology. What are your thoughts on the segment that you’re focused on and, you know, in terms of investment thesis. What do you think provides the best opportunities for investors within the sustainability in renewable energy segments?

Per Regnarsson: Well, that’s a good question, hopefully not to link an answer, but there’s certainly a lot of answers to that question.

Julian Klymochko: [Laugh].

Per Regnarsson: If you look at it from a capital market point of view, yeah, there is a lot of capital pouring into renewable energy in the private market, not just in the public market, I would say certainly in the private market from pension funds and other investors that are sitting on liquidity, they had to place and renewable energy is becoming a more and more important part of the real assets as a class, if you want. Used to be just real estate, then we became real estate infrastructure. Now it’s also renewable energy and everything has to be ESG compliant, so think from a sustainable investment point of view, that’s definitely a lot of interest and we are beginning to see that more and more institute investors are trying to balance their investments privately and publicly.

But then you have the other trends across from investor point of view that they want to have more direct investments. And that favor perhaps private investments as opposed to being a listed company. So, we see therefore that yield in renewable energy assets that are operating are compressing, you know, yields are getting lower because of the demand for these assets. We are seeing you know, very well known, listed renewable infrastructure funds, investing increasingly up streamers we say into construction assets which in our view is not to get better yield. It’s actually to get the yield they promised investors in the first place by taking on more risk. So again, from our point of view, coming with a, you say with a blank canvas, so to speak, we’re basically looking to be in the market where we think that we are adding the most value.

And that means that you probably want to have a balanced portfolio of development and operation. So, you can actually be attracted to other investors looking to buy assets. And that means that you’d get the upside from the early state’s development. And you’re balancing that with the cashflow operating assets. And then you combine that with some service income from being able to operate the same assets. So, I think that’s a long-term game. Short term is to buy enough critical mass into an entity so that you can establish these diversifications by country and establish some the diversification also by stage of the assets. And that’s what we are trying to focus on in the target that we are looking at.

Julian Klymochko: Now in terms of some of the deals that you’ve looked at for competitors, who are you competing against and, you know, a merger target, would it be infrastructure, investment funds? Would it be publicly listed operating companies? Would it be pension funds? All of the above?

Per Regnarsson: Well, the single answer is all the above. But I think I mentioned before, you know, that the infrastructure funds are being operating you know, great number of money from the ultimate investors, the ultimate you know, capital owners whether the pension funds or wealth management and these funds you know, are deploying them and helping to create this yield compression that I described. So, you got to find the markets where you know, I think one of the opportunities actually to go in and buy, you know, attractive assets that are undervalued based on, you know, some of the disruptions in the markets. So, I’m delighted that we have a team where we actually have a pretty good understanding of what’s going on in the open markets through many years of involvement, so that we can go in, we can go below the auctions, go below the radar and identify individuals that way. We think we have an opportunity to buy something that is slightly more attractive.

Julian Klymochko: Now you mentioned compressing yields, always imagine it’s some sort of spread to say, you know, the five-year treasury or something of that nature, have you seen it be correlated with financing rates, like in terms of compressing yields, obviously it’s competitive, but has pricing come down at all as interest rates have ticked up this year?

Per Regnarsson: There is a bit of that, but I think the mega trend of demand for renewable energy, the energy security aspect, that means that the increased interest rates haven’t hit the markets that hard yet, you know, longevity in terms of high interest rates is clearly going to affect the ability to put debt on these assets.

Julian Klymochko: Right.

Per Regnarsson: Which in the mature markets are often 80% [Inaudible 00:23:31] equity, right? So, you have a high degree of leverage in these assets. Now I think therefore you can, by not having all your exposure to operating assets in the debt market, that also allows you to have slightly, you know different risk profile. And then I think you know, when it comes to correlation in general, I’ve had been close to the [Inaudible 00:23:55] markets for many years. And until recently the [Inaudible 00:24:00] were interestingly not correlating with the REITs they were performing better than REITs. And probably as an example of property markets all suffering from COVID and the aspects that would cause people with commercial property markets to be slightly weaker. But I think the way I would look at yields and renewable energy to me has often been treating a German solar asset similar to a German bond. So that’s kind of the benchmark and then you add risk from a sector and a country to the yields, right. And then they obviously traded a premium to government bonds. So, there’s an element of what you’re suggesting that I think brings through, but there’s also nuances

Julian Klymochko: One interesting market dynamic that has played out over the past year, that I’d be interested in hearing your thoughts on is, you know, ESG was extremely popular for say, you know, five years up until about a year ago, just based on its out performance or they could say you can do good by doing good invest with ESG companies and outperform. And that was the case, just given the long tech low exposure to energy, oil, and gas and things of that nature. However, that relationship has flipped where there has been a massive outperformance of oil and gas and energy names, and ESG has underperformed, at least in the short term. Has there been any feedback from investors or change in attitudes just given the recent up performance of traditional energy and oil and gas vis-a-vis renewables and sustainable investments?

Per Regnarsson: Well, I’m probably not that informed to give a detail answer on it. I think what I’m seeing is that there is a lot of demand for renewable energy. And a lot of the investors looking at that sector are not allowed to invest in fossil fuels. So even with energy security, there are probably investment organizations that are debating to what degree they can put fossil fuels into an energy transition strategy. And you could argue that some extent that makes sense. Many years ago, I was involved in a power plant financing in Bangladesh and people were asking me, why are you going for a gas fire power plant? Why are you not going for solar? And Bangladesh at the time, one of the poorest countries. They’re doing a lot better today, actually went to speak, but still very poor country with a lot of flooding issues.

I mean, you can’t just take a poor country and ask them to go a hundred percent renewable from one day to the next, right. There are elements of that I think is relevant. And if it’s natural gas, as opposed to coal, that’s an improvement. Our own focus with ClimateRock is not that market, but I can see relevance in thinking energy transition so that we are not just ignoring the fact that we need to have this energy security addressed. And the world is becoming probably de globalized to some extent now, which back to your point about other energy sources, whether it’s green hydrogen, or whether it’s batteries and creating local supply chains or regional supply chains to become more independent. And with that increased energy security.

Michael Kesslering: And so where do you see, or where do you see the current ESG driven theme of investing fall short? You’d mentioned some of the themes that you’re seeing in energy transition and things of that nature, but what other changes would you like to see in the sector?

Per Regnarsson: Well, I think we will probably like to see some more, let’s call it product innovation. I think we are going for same level of efficiency in solar as we’ve done for the past decade, more or less. I know people in the sector would say that there are some improvements, but there’s no revolution going on at the moment. It it’s all sort of slow evolution of efficiency of what will take, panels, inverters, which not component of solar you know, are improving in efficiencies. But maybe we need to look at new materials for, as opposed to Silicon to try to really improve the panel efficiencies. In solar, you’d probably like to see much more solar on buildings. Why not integrate what it will take with windows where you have so much building that is vertical in big cities. I think there’s a massive opportunity in the solar markets to grow in many dimensions. Wind you know, another growth offshore with turbines getting bigger and bigger. But you can’t just continue to build bigger and bigger. You probably need to look at other ways of increasing the energy efficiency of the assets, so that you know, by increasing the efficiency of solar and wind, they’re already very competitive with fossil fuels, but if you can use this market opportunity to really make them more efficient, then it’s almost like there’s no way back afterwards. And then I think the growth of the green hydrogen market which is the market that’s a lot of buzz around. That is a market that’s been around for a long time.

And you know, you have lot of companies you know, whether it’s U.S. or Europe that’s been around for some time with technology, say green hydrogen. But the core component of green hydrogen hasn’t really developed much over the past decade. So there also need to look at what’s the next generation of the so-called electrolyzer used in green hydrogen and yeah, the balance of plant distribution of the gas. I think these are certainly aspects where the sector will improve. ESG is not really, for me to comment on. ESG is a terminology that was introduced to make investors more aware they have to invest in what is compliant with the environmental and social and governance rules. But you ultimately, to me, that’s just using best practice. You know, you got to do what you think is right. And ESG is just a way of regulating it.

Julian Klymochko: Now, Per. We spoke of a lot of themes on the show today. Solar, wind nuclear, various clean tech, renewable energy technologies. Now, if you could just pick one, what is one that investors should have on their radar over the next 10 years?

Per Regnarsson: Well, I think, I alluded to it already. To me it’s a renewable hydrogen. So, it’s using the growing capacity of renewable energy to power green hydrogen production. Green hydrogen or hydrogen markets is actually a significant component of the global energy markets. And there are many industries that are not able to make the full transition into the green economy unless they’re also able to transition their hydrogen consumption to green hydrogen from hydrogen or what we call reform hydrogen from oil and gas. So, renewable hydrogen is a massive [Inaudible 00:31:28] the next 10 years. That doesn’t prevent solar from growing. Doesn’t prevent wind from growing. I think you could also see much more development of hydroelectric power, but I think renewable hydrogen is a massive opportunity.

Julian Klymochko: Well, that’s a great place to end it, the recommendation of green hydrogen, renewable hydrogen to keep that on your radar for investors. So, thank you Per for coming on the show, the SPAC that you’re currently managing, ticker symbol CLRC. Trading in New York. So, investors can take a look into that if they want to follow along all the progress that you’re making at ClimateRock. So, wishing you the best of success, and we’ll be watching the story closely.

Per Regnarsson: Thank you Julian. Thank you, Michael. Thank you for being on the show.

Julian Klymochko: All right. Take care. Bye everybody

Per Regnarsson: Bye, bye.

Thanks for tuning in to the Absolute Return Podcast. This episode was brought to you by Accelerate Financial Technologies. Accelerate, because performance matters. Find out more at The views expressed in this podcast to the personal views of the participants and do not reflect the views of Accelerate. No aspect of this podcast constitutes investment legal or tax advice. Opinions expressed in this podcast should not be viewed as a recommendation or solicitation of an offer to buy or sell any securities or investment strategies. The information and opinions in this podcast are based on current market conditions and may fluctuate and change in the future. No representation or warranty expressed or implied is made on behalf of Accelerate as to the accuracy or completeness of the information contained in this podcast. Accelerate does not accept any liability for any direct indirect or consequential loss or damage suffered by any person as a result relying on all or any part of this podcast and any liability is expressly disclaimed.


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