“Energy transformation is an exciting area and one of the four specific verticals in which we are currently pursuing investments,” says Koch Strategic Platforms president David Park in this Q&A with Mergers & Acquisitions. “The energy transformation space could include investments in fossil fuel value chain transformation, new sources of energy, energy infrastructure and the electrification of transportation.”
Tell us about Koch Strategic Platforms.
Koch Strategic Platforms was established in the Fall of 2020 and was formed as part of Koch Industries’ larger organization, Koch Investments Group. Based in Wichita and Atlanta, we are currently pursuing public and private growth equity investments in companies within targeted industries that have growth tailwinds. Our primary focus areas are currently energy transformation, connectivity and computing, industrial automation, and healthcare. We will be focusing on leveraging Koch companies’ leading market positions to accelerate growth and create virtuous cycles of mutual benefit for us and our partners.
Do you see energy transformation as a cornerstone for your investments?
Energy transformation is an exciting area and one of the four specific verticals in which we are currently pursuing investments. The energy transformation space could include investments in fossil fuel value chain transformation, new sources of energy, energy infrastructure and the electrification of transportation. We continue to evaluate new areas of focus as well.
Are you eyeing other sectors?
KSP has committed over $1.2 billion in numerous sectors since our inception with the goal of investing $2-3 billion by year’s end. While we are keeping all options open, we have invested in connectivity & computing, energy transformation, industrial automation and healthcare. We are also evaluating opportunities in advanced materials, FinTech and cybersecurity.
What is your strategic vision for Koch Strategic Platforms?
KSP is focusing on proactive investing in growth equity companies where disruptive trends are accelerating and we can add value through Koch’s diverse knowledge and capabilities. We think of Koch as a laboratory—a place for innovation and experimentation—which allows us to bring value beyond just investing when it’s appropriate. We can often offer access to world-class, global capabilities in supply chain, engineering, finance, HR, etc. and also make customer and supplier connections in the dozens of industry verticals in more than 70 countries where Koch Industries operates. We set the goal of being the preferred investment partner with growth-focused, strategic companies who are innovating in “new economy” industries. We’re looking to make material minority equity investments in great companies with great management teams where there’s opportunity for mutual benefit.
What’s your take on SPACs?
We believe SPAC’s have a significant market presence today as a vehicle for companies to pursue a public ownership path. It is an area we are closely evaluating and seeking potential paths of opportunity.
Are you seeing a lot more SPACs compared to years past?
SPAC’s are certainly having their moment. Clearly, SPAC activity has seen a dramatic increase from the beginning of 2020 through today. We’re seeing companies with high-growth potential, buck the traditional IPO process, which we believe creates more opportunity for investment and potential forward-looking growth.
Will SPACs remain hot or are we seeing a SPAC bubble that will burst?
2020 was a record year for SPAC’s, and the pace of activity has picked up in early 2021. Are we at a cyclical high? I don’t know. We’re much more focused on investing in companies with great long term fundamentals and potential than trying to time market cycles.