To be prepared for the transition to a low-carbon economy, Shikhar Verma ’24 believes Rice students need experience beyond the classroom and exposure to the many complex factors in play.
With that in mind, he launched the student-managed Rice New Energy Fund (RNEF) last August. RNEF is the nation's first student-managed investment fund focused on the energy transition. Their ultimate goal is to generate returns for scholarships while advancing decarbonization, education and diversity in investing.
The RNEF is a platform for students to partake in “rigorous investment management while engaging with the complexities of the energy transition,” Verma said. The platform was set up to nurture the next generation of energy, sustainability and finance leaders on campus.
“Given the recent launch of the undergraduate business major at Rice, we are seeing unprecedented interest in energy finance and investing,” said Erica Friedman ‘25, chief operating officer of the RNEF.
The RNEF team explained that the average student-managed investment fund at colleges and universities manages $500,000 in assets, while and the Rice Undergraduate Investment Fund only had $40,000 in assets in 2021.
“We needed more funds and a more focused strategy to be competitive,” Verma said. “Everyone in Houston is talking about the energy transition, but not many people know what that actually entails. We want students to learn how to be responsible financiers and lead this transition.”
The student team believes that while the environmental, social and governance (ESG) realm for companies is still relatively new and uncharted, energy will always drive economic development. They hope to deploy traditional investment strategies to their portfolio of 200 new energy-related companies.
“Our team’s diverse academic background allows us to explore investments more holistically,” Verma said. “For instance, we have engineers who can evaluate technologies and scaling risk and pre-law students to appraise the regulatory and policy environment.”
To join the RNEF, students are first required to participate in the Rice Undergraduate Finance Club’s training program and undergraduate investment fund. The RNEF functions as a part of the club.
Verma said the RNEF is uniquely positioned to succeed at Rice not only due to Houston being at the heart of the transition but also because of the sheer strength and support of the local Rice alumni network in energy and finance. He and his fellow team members have established valuable relationships and gathered a notable group of mentors, advisers and donors for the fund, including former Rice Board of Trustees chair Bobby Tudor as well as renowned executives Steve Pattyn and Stephen Trauber.
The RNEF’s leaders have spent the last eight months fundraising - raising $200,000 in donations - building their team and refining their investment strategy. The fund’s mandate is focused on U.S.-listed public equities, and the team is planning to start investing in the fall semester.
To learn more about the fund’s operations and strategy, visit ricenewenergy.com.