AIMCo Expands Its Ownership in Howard Energy Partners

Today AIMCo announced it has expanded its ownership in Howard Energy Partners:

Alberta Investment Management Corporation (AIMCo) is pleased to announce that it has acquired Astatine Investment Partners’ (formerly Alinda Capital Partners) stake in Howard Energy Partners. As a result of this transaction, AIMCo holds a total ownership stake of 87 percent in Howard Energy Partners (HEP).

HEP is a diversified energy platform business with strategically located midstream and downstream assets in the United States, where long-term, fixed-fee contracts make up the majority of revenues. HEP was recently awarded a five-star ESG rating from GRESB, a leading ESG benchmark for global infrastructure investments. The company scored in the top 10 percent of all private companies who participated in the GRESB assessment and was named the 2022 Most Improved in Infrastructure.

AIMCo acquired an initial 28 percent stake in HEP, on behalf of certain of its clients, in early 2017. Since that time, the investment has performed well and continues to align strongly with AIMCo Infrastructure’s energy transition strategies. HEP management and other minority investors will continue to hold a 13 percent ownership interest in the company.

“We are excited to make further investment in Howard Energy and to grow our global portfolio of high-quality energy infrastructure assets on behalf of our clients,” said Ben Hawkins, Executive Managing Director & Head, Infrastructure, Renewables & Sustainable Investing. “AIMCo’s significant ownership ensures continuity of a very successful, long-term partnership with Howard Energy.”

“As one of the premier capital providers in the industry, AIMCo has been a long-time and trusted partner of HEP. They have supported our vision of growth and value creation while at the same time supporting our commitment of delivering positive energy in new and innovative ways,” said Mike Howard, HEP Chairman and CEO. “I am excited that we are significantly expanding our partnership in North America, and I believe that together we will be able to further scale our platform of assets for many years into the future.”

Terms of the transaction have not been disclosed.

TPH&Co., the energy business of Perella Weinberg Partners, served as financial advisor and Kirkland & Ellis LLP served as legal advisor to AIMCo on the transaction.

About Alberta Investment Management Corporation

AIMCo is one of Canada’s largest and most diversified institutional investment managers with more than $150 billion of assets under management. AIMCo was established on January 1, 2008, with a mandate to provide superior long-term investment results for its clients. AIMCo operates at arms-length from the Government of Alberta and invests globally on behalf of 32 pension, endowment, and government funds in the Province of Alberta.

About Howard Energy Partners

San Antonio-based Howard Midstream Energy Partners, LLC d/b/a Howard Energy Partners is a diversified, growth-oriented energy company focused on providing innovative midstream solutions to its customers. Howard Energy Partners owns and operates natural gas and crude oil pipelines, natural gas processing plants, refined products storage terminals, deep-water dock and rail facilities, fractionation facilities, hydrogen production facilities, renewable diesel logistics facilities, and other related midstream assets in Texas, New Mexico, Oklahoma, Pennsylvania, and Mexico. The company has corporate offices in San Antonio and Houston, Texas and Monterrey, Mexico.

For more information on Howard Energy Partners and our mission to deliver positive energy, please visit our website at www.howardenergypartners.com.

I invite my readers to go on to Howard Energy Partners' website here to read more about this company.

The first thing that struck me is they have an ESG report which you can download here.

This ESG report is excellent and full of great insights:


 



I condensed the last part but if you take the time to read Howard Energy Partners' full 2021 ESG report here, you'll see, it is excellent. 

What struck me was their core values and critically important, how they stand together:

We hold weekly, monthly, and quarterly management team meetings to ensure honesty, fairness and transparency throughout all our businesses. We value an inclusive workplace, treating all our employees and stakeholders fairly and without prejudice to gender, race, age, religion, disability, or socioeconomic status. We are a family and a team and believe in treating each other with respect.

It seems obvious but it's not and I firmly believe if you follow this core value and truly embrace it, your organization will be rewarded in many ways.

Moreover, it hardly surprises me that Howard Energy Partners recently received a five-star ESG rating by GRESB:

October 24, 2022
Howard Energy Partners
  • HEP scored in the top 10 percent of all private companies and was named Most Improved in Infrastructure
  • HEP achieved the highest Performance Score of any infrastructure company

SAN ANTONIO, Texas – October 24, 2022

Howard Energy Partners (HEP) today announced that GRESB has awarded the company a five-star ESG rating, a top-tier classification which is based on HEP’s overall score relative to the other 648 companies participating in the assessment. HEP also scored in the top 10 percent of all private companies who participated in the GRESB assessment and was named the 2022 Most Improved in Infrastructure. Additionally, the company achieved the highest Performance Score in the infrastructure assessment, which is based on HEP’s energy use, emissions data, environmental record, and health and safety of employees, the environment and the public.

“We are proud to receive a five-star rating from GRESB, which reflects our commitment to our core values and our mission to deliver positive energy,” said Brandon Burch, Executive Vice President and Chief Operating Officer. “ESG is not new to us at HEP. We have been implementing best practices into our jobs and projects since the formation of the company. As we continue to grow, our commitment will remain the same – to provide energy in the most responsible way possible.”

Earlier this year, HEP issued its inaugural ESG report, which further outlines the company’s sustainability initiatives, as well as corporate governance practices, community and industry partnerships, employee and customer engagement programs, vendor requirements, and other vital operating statistics and performance metrics.

HEP has participated in the GRESB assessment for seven consecutive years. GRESB data is used by hundreds of capital providers and thousands of asset managers to benchmark investments across portfolios and to better understand the opportunities, risks and choices that need to be made as the industry transitions to a more sustainable future. The GRESB ESG benchmark grew this year to cover more than $8.6 trillion of assets under management, up from $6.4 trillion the year before.

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ABOUT HOWARD ENERGY PARTNERS

San Antonio-based Howard Midstream Energy Partners, LLC d/b/a Howard Energy Partners is a diversified, growth-oriented energy company focused on providing innovative midstream solutions to its customers. Howard Energy Partners owns and operates natural gas and crude oil pipelines, natural gas processing plants, refined products storage terminals, deep-water dock and rail facilities, fractionation facilities, hydrogen production facilities, renewable diesel logistics facilities, and other related midstream assets in Texas, New Mexico, Oklahoma, Pennsylvania and Mexico. The company has corporate offices in San Antonio and Houston, Texas and Monterrey, Mexico.  For more information on Howard Energy Partners and our mission to deliver positive energy, please visit our website at www.howardenergypartners.com.

ABOUT HOWARD ENERGY PARTNERS

GRESB is a mission-driven and industry-led organization providing standardized and validated Environmental, Social, and Governance (ESG) data to financial markets. Established in 2009, GRESB has become the leading ESG benchmark for real estate and infrastructure investments across the world, used by more than 170 institutional and financial investors to inform decision-making. For more information, visit GRESB.com.

Why am I sharing all this information with my readers?

In order to understand why AIMCo is taking a controlling interest in Howard Energy Partners, you need to dig and really understand the company and why it fits so well in AIMCo's portfolio.

AIMCo takes responsible investing very seriously and its CEO Evan Siddall has explained why fossil fuel divestment is not their strategy

Howard Energy Compnay is an example of a diversified energy platform business with strategically located midstream and downstream assets in the United States, which is profitable and takes ESG very seriously. 

This is why I think it's best not to jump to any conclusions when looking at where large Canadian pensions invest.

I read something else on HARTENERGY's website which caught my attention:

Howard Energy Partners (HEP) is an innovative, growth-oriented midstream provider with assets across Texas, Pennsylvania and Mexico. Founded in June 2011, HEP is financially partnered with Alberta Investment Management Corp. (AIMCO) and Alinda Capital Partners, not traditional private-equity firms. This unique structure enables HEP to have a more long-term vision and to expand our capabilities and scope of service as our customers’ needs demand, according to the company’s website.

Oftentimes, you're much better off partnering with a large Canadian pension fund like AIMCo which shares your values and long-term vision.

On that front, I did note AIMCo received its EDGE re-certification:

Alberta Investment Management Corporation (AIMCo) Re-Certifies at the EDGE Assess Level

AIMCo shows a five-fold increase in flexible working, 30 percent women on the non-executive board, and notably improved colleague feedback

Edmonton, Alberta – Alberta Investment Management Corporation ("AIMCo"), one of Canada's largest and most diversified institutional investment managers with more than $160 billion of assets under management, has completed EDGE Assess certification, demonstrating a continued commitment to create a more gender-equal workplace. This is a re-certification following its initial EDGE Certification in 2020 — as Assess Level — and since then the assessment reported that AIMCo has strengthened the effectiveness of policies and practices for recruitment and promotion, flexible working and its organizational culture.

AIMCo has also made the most significant improvements in terms of gender representation at the operational, upper management, and top management levels – and exceeds the EDGE Standard of 30% for the share of women on the non-executive board. Since the last assessment in 2020 AIMCo’s policies and practices has resulted in a five-fold increase from 18% to 75% in the uptake of flexible working.

EDGE is the leading global assessment and business certification for gender and intersectional equity. The certification process involves a rigorous third-party review of representation across the pipeline, pay equity, effectiveness of policies and practices, and inclusiveness of an organization’s culture. As an integral part of the assessment, statistical data is analysed, policies and practices are reviewed, and employees receive a comprehensive survey to assess perceptions of career development opportunities in the workplace.

Krista Pell, Chief Human Resources Officer of AIMCo says the organization is committed to create a more equitable workplace: “We recognize the benefits and immense value of committing to a more gender-balanced workplace,” she says. “EDGE Certification represents a great recognition and opportunity to showcase our strong commitment to fostering an inclusive work culture, based on merit where everyone feels accepted and welcome.”

Following the assessment and the EDGE Certification, AIMCo has committed to a bespoke EDGE action plan that will support continued progress in the future. These commitments include AIMCo setting gender equity targets for each management level; implementing gender bias training for all individuals involved in recruitment, promotions or performance evaluations; developing guidelines for gender diverse candidate pools for all management positions; and implementing an organization-wide policy explicitly mentioning non-discrimination with regards to professional development, which includes gender.

Aniela Unguresan, Founder of EDGE Certified Foundation sees workplace DE&I as a journey that required incremental improvements against a global standard: “AIMCo’s EDGE Assess re-certification signals improvements in terms of representation, the effectiveness of policies and practices, and cultural inclusivity,” she says. “The EDGE action plan will guide the organization on its journey towards even greater workplace gender equity.”

Well done, this is important and it's equally important to highlight that diversity in all its forms isn't an end point, it's a journey where organizations need to strive to be better every year.

Alright, let me wrap it up there.

Below, a clip providing insight into the working culture at Howard Energy Partners and the values its employees work by daily. 

Also, Mike Howard came up with an idea to start a company, and the word meaningful endeavor resonated with him. In less than six months, basically, they went from taking those principles and the money that their original investors gave them and started Howard Energy Partners.

No doubt, Mike Howard knows his priorities and lives them daily. The company he founded has an incredible partner in AIMCo which shares his long-term vision and values to help take Howard Energy on its next growth phase.

Update: See my follow-up comment, a conversation with Ben Hawkins, Head of Infrastructure, Renewables and Sustainable Investing at AIMCo, discussing infrastructure, transition investing and more.

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