Features

Ben Nelson – Cresta Fund Management

Investing in alternate, renewable fuel sources—in farms and aviation

Farm waste doesn’t have to be wasteful, not according to Cresta Fund Management and its chief operating officer and general counsel, Ben Nelson. Headquartered in Texas, Cresta invests in sustainable infrastructure for a cleaner future. In short, it’s focused on helping North American companies decrease or eliminate carbon emissions.

One way to do that is to provide alternate fuel sources, with farm waste being a practical, beneficial and long-term solution. Investing in digestor facilities that convert farm waste, such as manure, to natural gas, Cresta is helping dairy farms reduce carbon emissions while producing a new form of fuel.

Andrew Neuberger, a Cresta Vice President, and Ben Nelson | Photo credit: Marina Kay Portraiture

To make this a reality, Nelson and his team of four at Cresta have worked closely with outside counsel on multiple investment deals. This included assisting LF Bioenergy, a Cresta portfolio company, to negotiate and close a minority investment by Marathon Petroleum, a publicly traded energy company. LF develops, constructs and operates renewable gas facilities on dairy farms. According to Nelson, LF is mitigating environmentally damaging methane emissions from manure management at large dairy farms—and replacing fossil natural gas with renewable fuels that can be used in compressed natural gas vehicles, home heating and high-heat industrial applications—anywhere conventional natural gas is currently used.

LF Bioenergy launched its first project at Stauffer Farm Dairy in upstate New York—resulting in the facility producing renewable fuels in early 2023. The company is now actively planning and developing several other projects across the nation.

“LF is helping decarbonize agriculture and heavy transport, both of which are key to economic activity and quality of life but do not have a lot of alternative energy transition solutions,” Nelson says. “Cresta is proud to be a part of this essential work.”

Reaping and sowing renewable energy

The LF investment was critical to advancing Cresta’s mission of supporting the growth of sustainable energy. However, according to Nelson, the transaction was unique and challenging because Marathon had never entered a joint venture with a private-equity-backed partner like LF.

Both sides had to be creative. Nelson, his team and external counsel had to craft an agreement that not only addressed Marathon’s requirements as a large public company but also Cresta’s mandates as a private equity fund. He adds that they also had to ensure the LF management team was well-positioned and incentivized to execute on the parties’ shared vision for the business model.

“Despite the various complexities, the Marathon transaction was exciting for us because it checked a lot of boxes—and, of course, we worked hard to ensure its success,” he tells Vanguard.

The completed agreement meant LF received an additional strong capital partner in Marathon, which will help it expand its business. It also provided a cash return on Cresta’s investment, setting the fund up to return capital to its partners.

Ben Nelson | Chief Operating Officer and General Counsel | Cresta Fund Management

The Come-By-Chance Refinery in Newfoundland & Labrador, Canada, which Braya Renewable Fuels, a Cresta portfolio company, is converting to renewable diesel operations.

The LF joint venture is one of many deals Nelson and the Cresta Fund legal team have handled just this year.

In April 2023, Braya Renewable Fuels, a Canadian producer of low-emission renewable fuels and part of Cresta’s portfolio, closed on a $300 million preferred equity investment from Energy Capital Partners. Nelson and his team’s expertise and involvement, as well as their collaboration with Braya’s general counsel and external advisors like outside counsel and Capstone, a global strategy firm, were crucial to finalizing this investment.

Nelson says this deal will finance the conversion of Braya’s Come by Chance refinery in Newfoundland and Labrador, Canada, a traditional oil refinery idle since the COVID-19 quarantines. When operational later this year, the facility will refine vegetable oil and waste products, such as used cooking oil, into renewable fuels to help decarbonize heavy transport and aviation.

“This investment had several aspects requiring creative thought and structuring and required a deep understanding of Braya’s business, capital markets and the renewable fuel industry,” Nelson says. “We couldn’t have accomplished this without collaborating with skilled and knowledgeable external counsel.”

Hot air for a cooler future

While these two were standout deals for Cresta and Nelson in 2023, he’s proud of several others Cresta has completed since he joined in August 2019.

In 2021, he and his team worked with outside counsel to structure and negotiate Cresta’s investment in San Joaquin Renewables as the company develops a biomass gasification project in California’s San Joaquin Valley. When complete, this project will convert agricultural waste products like pistachio shells to renewable natural gas. Nelson thinks SJR will be especially valuable as he anticipates it will be able to transform over 1,000 tons of biomass a day into renewable fuel—the equivalent of taking 52,000 gasoline vehicles off the road each year.

Ben Nelson | Chief Operating Officer and General Counsel | Cresta Fund Management

Cresta team photo at Cresta’s 2023 annual meeting held at the George W. Bush Library in Dallas, Texas.

Also, in 2021, he worked on a project with the Cresta-backed company Lapis focused on capturing and sequestering carbon dioxide.

Nelson grew up in a small town between Portland, Oregon, and Mt. Hood but has spent most of his adult life in Dallas. He earned a bachelor’s degree in history from Stanford and a law degree from Duke University.

Nelson says he enjoys the variety of work he deals with at Cresta and that it’s a nice change from the start of his career when he spent over a decade in private practice. He was drawn to Cresta not just because of its focus on renewable energy and fuel sources but because it is working to decarbonize industries that traditionally have limited environmentally friendly options, such as aviation and heavy industry.

“Cresta is here to invest in a brighter future, and I’m excited that our legal team is a big part of making that happen,” Nelson says.

View this feature in the Vanguard Fall II 2023 Edition here.

Published on: September 21, 2023

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