// RITHM ENERGY STRATEGIES
Investing in the Electric Revolution
Understanding the multi-decade transformation of global electricity infrastructure and the investment case at its core.
// Overview
What is the Electric Revolution?
The Electric Revolution is not a moment - it is a structural shift in how the world produces, moves, and consumes energy. Building conviction around this theme requires the same deliberate, research-led approach that has guided investment thinking across credit, real estate, and alternative asset classes.
Global electricity demand is on a structural growth trajectory. Energy transition, electrification, digitalization, and reindustrialization are converging forces that the IEA (International Energy Agency) projects could drive a potential doubling of global power demand over the next 25 years. That transformation does not happen without a complete rebuilding of how electricity moves from where it is generated to where it is consumed.
The question worth asking is not who generates the power, but who delivers it. The electrical equipment companies that transmit and distribute electricity sit at the heart of this transformation and at the center of a compelling long-term investment case.
// MARKET DYNAMICS
The era of flat power demand is over.
Four structural forces are reshaping global electricity demand - not cyclically, but permanently. Together, they are creating a scale of infrastructure investment that makes grid buildout one of the most consequential capital allocation themes of the coming decades.
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01
Energy Transition
The shift away from fossil fuel-based generation toward renewable sources - hydro, wind, and solar - requires a wholesale reconstruction of how electricity is produced, transmitted, and distributed. Every new generation source needs the transmission and distribution infrastructure to deliver its power to where it is needed.
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02
Electrification
As internal combustion engines give way to EVs and gas furnaces to heat pumps, the electrification of transport, heating, and industrial processes is placing sustained new demand on grids that were designed and built for a different era of consumption.
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03
Digitalization
AI data centers, 5G and 6G networks, and cloud infrastructure are among the fastest-growing consumers of electricity globally. In the United States, data centers are projected to account for nearly half of all electricity demand growth through the end of this decade - a pace of growth that has no historical precedent.
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04
Reindustrialization
The onshoring of manufacturing and supply chains is driving a sustained increase in industrial electricity consumption - adding another durable layer to long-term demand growth that cannot be absorbed by the existing grid without significant and sustained capital investment.
2x
Global electricity demand projected to potentially double over the next 25 years¹
$700B+
Projected annual global grid investment by end of the decade²
70%+
Of U.S. electric grid infrastructure is more than 25 years old and built for a different era of demand³
// Our Approach
Where in the value chain does the durable opportunity sit?
Most energy transition approaches have concentrated exposure in renewable generators, green technology developers, and utilities - sectors facing high competition, rapidly changing technology, and meaningful regulatory uncertainty. The more structurally durable opportunity lies one layer upstream.
Electricity Value Chain
Generation
Power source
Distribution
Medium voltage
Transmission
High voltage
Consumption
End user
Focus: Transmission & Distribution - the equipment layer that every energy source depends on to function, regardless of generation technology.
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Picks and Shovels, Not the Mine
The investment case centers on companies selling the underlying equipment to renewable developers, green technology companies, and utilities - rather than those players themselves. This framing offers exposure to the core demand theme without concentrating risk in technology outcomes, construction timelines, or commodity prices.
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Spending That Cannot Be Deferred
Over 70% of the U.S. electric grid is more than 25 years old. Grid investment is not optional - it is a prerequisite for economic function. The electrical equipment companies at the center of this buildout benefit from demand that is structurally driven and not dependent on any single policy regime, technology winner, or economic cycle.
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Rigorous, Research-Led Conviction
A rigorous, research-led approach - grounded in fundamental analysis, cash flow modeling, and continuous valuation discipline - is essential to navigating this space. The investable universe spans approximately 170 companies across electrical equipment, power infrastructure, environmental services, and natural gas infrastructure.
// Whitepapers
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Investment Opportunities Amid the Electric Revolution
DownloadArtificial intelligence and the rapid buildout of data centers have captured the attention of the business community, financial markets and policymakers. This paper explores how the evolution from digital to physical AI could broaden and extend the electrical investment cycle.
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Digital AI to Physical AI - The Next Chapter in Electricity Demand
DownloadArtificial intelligence (AI) and the rapid buildout of data centers have captured the attention of the business community, financial markets and policymakers. This paper explores how the evolution from digital to physical AI could broaden and extend the electrical investment cycle.
// The Team
Experience built across decades of energy investing.
The Energy Strategies team combines deep sector expertise in energy infrastructure with broad capital markets experience - supported by an established platform for risk management, compliance, and investment governance.
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David LaBonte
Co-Head, Energy Strategies
Rithm Capital
Read Bio
CloseDavid LaBonteCo-Head, Energy Strategies
Rithm Capital
Biography
David brings over 30 years of energy investing experience. Before joining Rithm Capital in 2024, he was a Partner and Senior Managing Director at Kayne Anderson from 2005 to 2023, where he led the management of long/short hedge funds and long-only products across energy infrastructure and the broader renewable power industry. Prior to Kayne Anderson, David was a Managing Director in the U.S. Equity Research Division at Citi, where he covered energy infrastructure and was named a top-ranked analyst for stock selection by the Wall Street Journal.
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Andrew Sloves
Co-Head, Energy Strategies
Rithm Capital
Read Bio
CloseAndrew SlovesCo-Head, Energy Strategies
Rithm Capital
Biography
Andrew brings over 40 years of investment experience spanning multiple asset classes. He most recently served on the board of Rithm Capital through the acquisitions of Genesis, Caliber, and Sculptor and the internalization of the management contract. Previously, Andrew was a Managing Director at JP Morgan and Bear Stearns, where he ran securitised product sales on the West Coast. He began his career at Kleinwort Benson in the interest rate swaps group, and subsequently as an analyst and trader at Capital Group.
// Frequently Asked Questions
Common Questions
The Electric Revolution refers to the structural transformation underway in how the world produces, transmits, and consumes electricity. Four converging forces - energy transition, electrification, digitalization, and reindustrialization - are driving a sustained increase in global power demand that the IEA projects could double over the next 25 years. This represents one of the most durable multi-decade investment themes currently visible in the market.
Renewable energy developers, utilities, and green technology companies are exposed to high competition, rapidly changing technology, and regulatory uncertainty - factors that can make returns volatile and difficult to underwrite. Electrical equipment companies occupy a different position: they supply the transformers, switchgears, cables, and circuit breakers that every energy source - renewable or conventional - requires to function. This picks-and-shovels framing offers exposure to the same structural tailwinds with meaningfully different risk characteristics.
Over 70% of the U.S. electric grid is more than 25 years old - infrastructure built for a different era of demand. At the same time, electricity consumption is accelerating from multiple directions simultaneously: AI data centres, EV adoption, industrial electrification, and new manufacturing. The grid cannot absorb this demand without significant ongoing investment. That investment is not elective - it is a prerequisite for economic function, making it structurally driven rather than dependent on economic cycles or policy direction.
Navigating this space well requires rigorous scenario analysis, continuous valuation discipline, and active monitoring of market risks, liquidity, and positioning. The investment universe is broad - spanning approximately 170 companies - and demands a consistent, repeatable research process to assess it. Clear criteria should govern when to reduce or exit positions: when the underlying thesis changes, when valuation targets are reached, or when better-risk-adjusted opportunities emerge elsewhere.
This page is intended for institutional investors and qualified purchasers seeking to understand the electric grid investment theme. It is provided for informational and educational purposes only and does not constitute an offer to sell or a solicitation to buy any securities. Those interested in learning more about capabilities in this area are encouraged to get in touch directly.
1International Energy Agency (IEA) – World Energy Outlook, 2025.
2IEA – World Energy Investment 2024 and Rystad Energy.
3U.S. Department of Energy.
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