Goyal Powers Carlyle's Energy & AI Infrastructure Strategy

In Brief:

Pooja Goyal, Partner and CIO of Carlyle's Infrastructure Group, shared her strategic approach to energy transition and infrastructure investing on S&P Global's "Private Markets 360" podcast. With over 20 years of experience, including 17 years at Goldman Sachs, Goyal highlights how Carlyle built Copia Power from scratch to capitalize on the growing demand for power, particularly for data centers and AI infrastructure. She emphasizes the importance of patient capital, deep sector expertise, and strategic financing in successfully navigating complex infrastructure investments during a time of unprecedented demand for power resources.

Big Picture Drivers:

• Energy transition: Growing demand for power electrons, especially for AI and data center infrastructure

• Market dynamics: Critical importance of transmission and distribution infrastructure

• Value creation: Focusing on de-risking milestones rather than perfecting valuations

• Partnership approach: Working collaboratively with multiple stakeholders for long-term success

Key Insights:

• Thesis-driven approach: Carlyle identified power demand growth before the AI boom, allowing them to position strategically ahead of competitors

• Build vs. buy decision: Created Copia Power after finding existing platforms overvalued with excessive overhead and unrealistic growth assumptions

• Stage-gated capital deployment: Managing execution risk by deploying capital based on de-risking milestones rather than large upfront investments

• Infrastructure convergence: Power and digital infrastructure sectors are merging as data centers require massive power resources (50% of costs are power-related)

• Public-private partnerships: Complex stakeholder management crucial for success, requiring coordination with government entities, airlines, local communities, and financing partners

• AI infrastructure reality check: While AI growth creates tremendous opportunities, Goyal cautions that not all "rosy projections" will materialize due to practical limitations

• Geographic strategy: Targeting tier 2 and tier 3 markets with strong growth fundamentals but less competition than primary markets

By The Numbers:

• 1.5 gigawatts: Copia Power's current operating solar and storage capacity

• 3 gigawatts: Additional Copia Power capacity under construction

• 6 years: Timeline from JFK Terminal project initiation to expected completion in 2026

• 50%: Portion of data center development costs related to power infrastructure

Memorable Quotes:

• "We have a very thesis-driven approach to investing in infrastructure" - Pooja Goyal, explaining how Carlyle anticipated power demand growth before the AI boom

• "I don't believe that all of these extremely rosy projections are going to come true" - Pooja Goyal, offering a realistic assessment of the AI infrastructure growth trajectory

• "These projects require patience and they require that flexibility to be able to get to that right outcome" - Pooja Goyal, on navigating challenges like unexpected "desert tortoise" discoveries during project development

• "Don't go into something because it's topical" - Pooja Goyal, advising career professionals to pursue genuine interests rather than following investment trends

• "Capital markets and capital markets expertise is incredibly important" - Pooja Goyal, highlighting how financing expertise drives value creation in infrastructure investments

The Wrap: 

Goyal's insights demonstrate how infrastructure investing requires specialized expertise, patient capital deployment, and strategic foresight. As the lines between traditional infrastructure and new technologies blur, especially in the power and digital sectors, Carlyle's approach of building platforms from scratch and navigating complex stakeholder relationships positions them to capitalize on AI-driven growth while managing risks in a rapidly evolving landscape.