Krane is teaming up with Rockefeller’s Not-So-Secret Spy over his superstar work at Pittsburgh’s most powerful private enterprise.
Nick and Krane (right) come from vastly different perspectives, backgrounds, and political party. Krane: Technology expert, 5th generation coal miner, managing director and CEO of W.L. Gore & Associates. Nick: Democracy activist, former Congressional staffer, leading team at DemocracyNow!
On fracking, clean tech, water, and clean politics. Nick and Krane shared their respective visions for clean energy and policymaking with me over lunch.
For Krane, the key is philanthropy and giving money to support other venture philanthropists in civil society and foundations. He said:
“We cannot just fund self-interested individuals that want to fund ideological projects. It is not enough to say, ‘Let’s focus on clean energy.”
Krane said:
“We spend almost a billion dollars in giving. That investment has turned into Fortune 500 companies. So what is the value of that? That’s an interesting question.”
Krane, joined KKR in the energy and infrastructure space in late 2015. He focused on holding on to the profits from energy infrastructure companies, instead of selling them as they all are doing.
Krane mentioned that major energy infrastructure players like Kinder Morgan (KMI) and Kinder Morgan Energy Partners (KMP) have stockholders voting on management decisions. Krane believes that the structure of KKR ensures investors of certain kinds of infrastructure stocks get the dividends they paid for.
“When you are a company that invests in natural resources and has a controlling interest in Kinder Morgan, you have to commit to your shareholders. It’s not like Lockheed Martin is a lock on the most sophisticated jet fighter. The company can find a competitor. They have to identify the competition they need to compete with them. They have to articulate an argument for why they are uniquely positioned. So we do that.”
Krane is also looking for other types of businesses that he believes can be truly transformative, something KKR is good at. He said:
“There are situations where we get into companies that can be truly transformational. For example, we find solar companies that have captured contracts on a long-term basis, so that they can generate predictable cash flows. So we are looking for those types of companies.”
Krane is on a mission to change the way nonprofits, in particular, think about doing business. He’s worked with and provided a lot of financing and investments to public and private nonprofit organizations. “If you look at what we’ve been doing, I think we have made significant advances in making sure the foundations are active participants on the Hill.”
In addition to the idea of engagement and respectability, Krane says it is important to never be embarrassed to make mistakes in your work. He likes that KKR seems to have in its culture that attitude of people that are willing to be different.
“[In recent years we’ve taken a lot of heat. There was a lot of anger about [the inheritance tax tax change]. They had been arguing that public policy should encourage philanthropy for over 100 years. But we have been hit hard on that…so we had a rare moment of humility. We look back and think, that’s just part of the business.”
Most of these concepts and values, relate to their climate investments. Krane agreed with our takeaway: there is no “empowerment” event that makes the climate revolution happen. It needs to be earned, adopted, and implemented by everyone from volunteers to policy makers and citizens at large. He said:
“We actually found the best places to invest in energy were places that have a deep understanding about energy. That is driven by big constituencies. They have a critical mass of people who do care, and are prepared to tell their elected representatives to make good choices in their decision making.”