EY Alumni Interview December 2022

EY Alumni interview with Karl Byrne, BlackRock Real Assets

A near lifelong interest in sustainability led EY Ireland alumnus Karl Byrne to his current role as Vice President with Blackrock’s Climate Infrastructure Team in Dublin. “I’ve always had an interest in the space, and it was part of my long-term plan to work in it,” he says. “It goes back to when I was a kid when I was looking at how people consumed things and saw that it was not sustainable. I read the book Ten Technologies to Save the Planet by Chris Goodall when I was 16 and it really piqued my interest in the space and looking back now it’s interesting to see how some of the technologies didn’t take off like the author predicted while others far exceeded his expectations.”

He joined Blackrock in February of 2018 having spent two years as an Associate Director with EY. “The climate infrastructure team was the renewable power group when I joined, and its remit has been broadened since. We invest in the decarbonisation of the electricity system. Our investments had been mainly in wind and solar power generation, but we have broadened that to encompass technologies like EV charging, grid stability and storage. We are part of a truly global team of 70 people scattered across the world. The Global Head of Blackrock Climate Infrastructure is based in New York, our global CIO is in Dublin, and we have a large team in London.”

The team manages $10 billion of capital across six funds and has investments in a number of windfarms and solar plants on the island of Ireland. “We have a number of investments in Ireland, but the team here has a Europe-wide remit,” Byrne adds.

Byrne’s team is focused on infrastructure, but Blackrock also has other investments in the broader renewables and sustainability space. “Blackrock has different pots of capital and another group within the company operates quite like a venture capital fund and invests in firms developing new technologies in the area and so on. We are more in the infrastructure space with 20-to-40-year cash flow models. We have very long-term horizons and that makes us less exposed to market volatility which tends to even out over the long term.”

He began his career as a chartered account and worked in Australia for a period before moving back to Ireland in 2015 to join ESB where he worked on the financial analysis of renewable power investments.

“I then had the opportunity to join EY to do something similar to what I had been doing with ESB except on the consulting side,” he explains. “That was one aspect of my role. The team I joined in EY was growing really quickly. My background is in company valuations, and I supported other departments and teams in EY as well. There was huge demand for financial modelling services, and I had that skill set so I was able to pivot into that space."

"I worked with some really interesting clients, some in renewables, some not. I was involved in building modelling and supported clients raising debt or for M&A activity. A lot of renewable organisations need to raise finance and the banks and others are looking for their business models to be audited by third parties. That clean bill of health enables companies to raise debt and build projects and I really enjoyed this aspect of the role.”

He found the role both interesting and rewarding. “It was a great opportunity to develop and grow professionally. In EY, if you are agile and nimble you will get opportunities to go beyond your job description and carve out a niche for yourself in an area. I wanted to focus 100% of my time on renewables.”

That led him to move to Blackrock. “It’s very different,” he notes. “In my financial modelling role in EY I would get a call from a client when they need help, often working to extremely tight deadlines. I’m now on the other side and I am managing a team of people doing the analysis. Being 100% focused on the space means we are able to see trends as they happen if not a little bit before. We are on the right side of those deadlines. I have been able to take the insights, learnings and experience I gained in EY and use them here. EY is a great place to learn.”

Looking at the current global investment environment he says stability is badly needed. “To the extent that government interventions can make it more difficult to take a long-term view, some countries are more difficult than others to put money into for 30 years. Political and regulatory risk have to be taken into account. Government policies can make a place less attractive for investment and you can struggle to get projects done in this space. When there is a stable environment, it allows capital to flow into these projects. I’m not just talking about our funds. All funds are mobile pots of international capital. They will go to where the return is best, and the risk is least. We all depend on the rule of law.”

He looks to the future with palpable enthusiasm and excitement. “The technology is always moving,” he says. “We have just made large investment in battery storage company in the UK. We are helping the company become a leader in that sector. If you had asked me last year if we would be doing that, I would have said no. That’s part of the joy of working in an area like energy transition. When you wake up in the morning and don’t know what technologies will come up in calls that day.”

He points to the potential of electric vehicles to make a contribution to the decarbonisation of Ireland’s electricity grid. “Ireland has 5GW of wind power at the moment and at times of lower demand renewable generation is constrained. The development of the smart grid can change that with EV owners charging up their batteries overnight and potentially supplying the power back to the grid during the day when it is most needed. That will be very important in enabling the energy transition and will ultimately allow more renewables to be built. We can already see that happening in the UK and I can see it coming here as well.”

Other technologies are on the way. “We will see a lot of investment into renewables up until 2030 and not all of that will go into the grid. A lot will go into things like electrolysis plants to manufacture green hydrogen. Hydrogen is not easy to transport, though. The first thing we need to do is electrify everything we can. A normal car should definitely be electric, for example. But an 18-wheel, 40 tonne truck is different. There is definitely a case for hydrogen there. There are always new technologies coming along. That’s part of what makes this space so great to work in.”