Why Does Rendeavour Chase Forever Projects?

Stephen Jennings says there are not many perpetual projects anywhere. Few projects literally have a 50 year time horizon, because there is not really very much 50 year capital. Private equity money is supposedly seven years, but you have to sell before the seven years, so private equity is really five years, and people still think of that as long term capital. Development finance institutions say they have long term capital. They do not. They have to generate a return, they talk about exits, and they do not go into 30 year projects.

Rendeavour treats the perpetual horizon as a comparative advantage. The firm looks for less competitive spaces, and virtually no capital is available for very long term projects, so it is very hard for somebody else to spend billions of dollars on a 40 year project. Jennings says it could happen, and it is very unlikely.

The edge needs alignment across capital structure, values, and senior executives. A 40 year project cannot have an executive who wants to make all his money in the next two years. A shareholder with a five year view creates a problem three years later, pushing for an exit or for more cash where it is not optimal in an NPV sense. Disciplined shareholder selection is extremely important.