Structured Capital 101: Keyframe’s Approach to Climate Finance

John Rappaport is the Chief Investment Officer at Keyframe Capital, a special situations fund manager. They help management teams solve complex asset and corporate financing requirements. In finance speak, this is often referred to as structured capital—the process of separating a company's capital structure into layers, enabling each layer to be fit for an investor seeking that specific risk-return profile.

As John shares, structured capital can often be a good fit for companies in the energy transition, as those in renewable energy and adjacent categories often have high upfront capital costs and a relatively low cost of ongoing production.

John has spent much of his career in financial roles within the energy and transportation sectors. Prior to founding Keyframe in 2020, he joined Cyrus Capital Partners in 2008, and before that, he worked for Sankaty Advisors, a division of Bain Capital. He has lectured on structured capital and economics at Yale University and sits on the boards of many companies in the energy transition space, including Wonder Capital, Utility Data, and Sealed, among others.

So, let's dive into the wonky but important world of structured capital.

In this episode, we cover: 

• [1:57] Overview of Keyframe Capital
• [2:52] The origin of Keyframe and a story about Terawatt Infrastructure
• [11:25] Understanding structured capital
• [17:01] Examples of structured capital: Infrastructure as a service
• [21:10] Keyframe’s thesis-driven approach
• [25:56] The data center financing challenge
• [31:02] When and how founders should engage with structured capital providers
• [35:48] Keyframe’s current focus areas

Episode recorded on Jan 21, 2025 (Published on Feb 6, 2025)

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*Editing and post-production work for this episode was provided by The Podcast Consultant