Is Infrastructure Private Equity a better Work/Life balance?
I've always wanted to make the move over to private equity but I've been doing a lot of research and it seems that infra PE has a better Work/Life balance than traditional PE. Would love to hear the communities thoughts and opinions on this. Obviously, Infra PE at Apollo probably is the same as normal Apollo hours but for more infra-focused PE like AMP Capital, Macquire, Ardian, and EIG Partners, etc. Will the hours actually be better?
Haha no. It’s the opposite if anything. There is definitely a spectrum though with some pension funds being on the more relaxed end and the independent GPs (GIP, Stonepeak, ISQ, etc) being what you think of as Apollo-esque.
In general, if you are looking for WLB, you will absolutely not find it in Infra PE.
Why is infra PE supposed to be sweatier than other type of PE? I know it’s not a rule, but trying to understand your logic
Much more granular modelling, often more hairy deals compared to vanilla corporates
Interesting okay, is there another PE sector that maybe what I've read was referring to like energy PE?
Any sort of infra tends to be more sweaty, not universal, but a general principle.
Not sure who is sharing this information but any relatively good infrastructure group is way more technical, does more obscure analysis and grinds way harder in the model than any regular PE group. Constantly running irr bridges, looking and basis point differences. For the incremental work, with such a long term hold and less ability to actually impact the business (driven by macro and gdp); most people are usually working more in Infra PE. As a principal in infra PE you are still doing Associate level work and thinking (feel free to correct this if I am wrong but that’s based on my experience in an Infra group)
Yah I've seen that some models will get into the real nitty gritty like thousands of lines. Thanks for more insight!
Not to mention infra pay is 50% less than normal PE once you get past the associate / VP level.
Inaccurate. I know a big SWF (think more than few hundred billion) that does direct infra investments. This year their PE team is absolute shit while their Infra team was the star (and got paid accordingly). Sure it's market dynamics, but Infra is very resilient as an asset class during times of turbulence (like now)
Late to the party but SWF comp is not really comparable to regular alt manager comp across any strategy or level... different type of firm in general and importantly SWFs don't have to answer to investors the way a large PE firm does - especially the public players, they do not have latitude to do whatever they want with comp.
Correct that infra pay tends to be lower, especially at MM infra shops. However, MF infra pay is very comparable with MF PE pay at all levels (only ~15% lower or so), and therefore ends up being larger than UMM PE / any other non-MF x strategy
Giving an alternate perspective... the shop I am at is really not that bad (UMM, 5-10bn latest fund size):
a) WLB seems to be much better than peers (both infra and buyout)
b) comp is at a slight discount to market, but that is just my shop. worth it for the better WLB. No idea where the "50% comp discount" to corporate PE .comes from as that's total nonsense lol. you think the partners at EQT infra are making materially less than their corp PE counterparts? give me a break
c) most infra funds leverage advisors extensively and all good ones have in house ops teams who diligence key inputs extensively... why would they entrust that to ex-banking associates with 0 technical/engineering skills?
Infra gets a lot of hate on this forum and really not sure why lol, seems to be the same misinformation parroted back and forth
Pay is 50% of Corp PE due to much lower carry which is also realized later. It also takes much longer to get promoted and there is a lack of optionality.
This is precisely the kind of misinformation that is so confidently spewed on this forum that is incredibly frustrating. Do you work in the sector or is this just your opinion?
Once again, do you think IPs who work in infrastructure would not want to push for the best possible economics for their firms? You do know there is more than one carry structure right? Let’s take long life vehicles (15 years), where the product is yield and not capital gains for example - many of these funds have interim carry payouts over the life of the fund, starting in year 6. These would be based on the fund taking a portion of the yield, assuming they meet the hurdle (which could be distributions to date, a MOIC target based on the FMV of the portfolio etc.). It really is not as simple as “infra investment long therefore carry bad”.
Other infra funds pursuing a capital gains strategy have the same investment cycle as PE… and in many cases returns are not far off.
Edit: I missed the last points of your post. I’ll bite, despite how confidently incorrect you are.
Longer to get promoted? Wtf? I have worked with MDs at top funds who are 32 years old? It is quite literally the exact same promotion cycle. Are you conflating long fund life with promotion? If so, that’s pretty retarded.
Lack of optionality- um ok, but you do anything for a long time you lose options. Just how long do you expect to stay a generalist? Nobody had any need for a senior generalist lol. Also much infra investing is basically indistinguishable from an industrials group, so it’s really not as pigeonholing as FIG or REPE.
This is hilarious
Any chance your shop is active in APAC?
Yes
LMAO Infra PE is arguably more sweaty, meticulous, neurotic, detail-oriented, and longer hours than corporate PE.
Especially names you mentioned like MacQ.
I would not consider Infra PE to be any different, workload / culture-wise, than any other vanilla PE. Literally, just think of it as a sector focus within a regular PE shop (e.g., being in the healthcare vertical). Yes, models are more granular, less operational value-add, longer hold time, etc. But functionally it's the same thing unless you're really just doing greenfield shit. There are good culture shops (which are rarer, just like regular ole PE), and there are bad culture shops. At many funds, they comp Associates/Sr. Associates (and cash comp for VPs) on-par with their corp buyout counterparts because, as mentioned, there's no functional difference in the actual work responsibilities.
Also, a lot of times you can expect the AUM / headcount to be decently larger for Infra, which can counteract the points brought up about economics. Again, not a good or bad thing, just a choice.
Agree with all comments on model depth and complexity, DD spanning hundreds of pages per workstream, layers upon layers of debt tranches, inordinate number of SPVs in a group structure. I can go on, but the point is this - people who work in infra PE aren’t necessarily there for the money (on an hour or on an effort adjusted basis), they do it for the love of the game and because once/if it hits a chord, it becomes a lifestyle and everything else just feels second-best / uninteresting. So in the end, one might argue that yes it offers better work-life BALANCE because in spite of working like a dog, one does it because one genuinely enjoys it.
I think it’s shop dependent rather than the group itself. Sure it’s more technical , detailed modelling etc but the infra bankers are handling the model.
if you are at a mega fund then ok like any other industry that will be hell. To give context I’m at a MM shop and have the best WLB ever. Most weeks 40 hours a week no weekends. Of course it’s also a slower year this year
If you are okay with it can you message me what firm this is?
If active in APAC keen to know the name as well.
May I also know what firm that is? Thanks.
It is shop dependant but outside of MacQ (who outsources everything) the best infra shops do their own modeling
I was an associate at Warburg Pincus in the past and have been doing infra PE for the past 7 years.
Although there is a lot of truth in the many comments highlighting the intricacies and details of analysis/modeling on infra when compared to PE, your work-life balance is not dependent on this fact. Reality is that "sweatiness" is a function of team size, culture, deal flow and who/how good is your boss.
Happy to take further questions on the topic.
How is renewables corp dev (greenfield + brownfield) experienced looked at for UMM infra PE roles? I have 1.5 yrs of experience in it, but want to transition into infra PE soon. Previously have spent time as a tmt/fig banking ib analyst / associate (4 yrs) and 1 year at a LMM PE (CEO closed down the team). I am a M7 MBA grad.
Your experience looks solid to transition to infra PE. Would encourage you to try to make a move sooner rather than later.
In your experience, is it true nevertheless that infra has a bad culture/WLB? Due to the Macquarie DNA (as I've seen others on here claim)?
Some of the funds mentioned in this thread are infamous for their bad culture but that is unrelated to them being infra-focused, rather to the leadership of the GP. I have not heard bad things about Macquarie specifically.
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WLB and overall experience is undeniably much better now than at WP.
How is tax equity at a developer looked at for a infra PE? Looking to make a transition but wanted to gain some insight on if this transition is possible, Thanks.
What sector were you focused on before infra? Why do you find this more interesting? Are you able to comment on the biggest differences in the DD process - for example I imagine less CDD focus on market / competition etc.
Also, with so many infra funds now being launched - some invest in infra type assets, some in traditional infra, many now in climate / energy transition. Is the latter very different to traditional infra investing and what're your thoughts on which type of fund you'd join now or how to assess which funds work on the most interesting assets? Hard for me to understand how the funds differentiate between each other from the outside.
I was a generalist since I wasn't in the US where they divide by groups even at the Associate level. I worked mainly on consumer, retail, education and healthcare deals.
Indeed, CDD is less intense in infra as most of the time revenues are contracted or regulated. For assets/companies exposed to competition, CDD can be as intense as in PE. Given the returns are lower and less exposed to diverging views from buyers on future growth, a lot of the DD can be directed to tax efficiency and financing matters. Technical DD is also very important given most businesses are asset-intensive.
With the risk of stating the obvious I would not join funds that historically focused on the O&G space such as EIG or ArcLight. Those need to rebrand themselves to be able to attract more LP capital, which is a big challenge in the current fundraising environment. I would look for opportunities in the more generalist funds that don't have a specific focus as to diminish the risk of the whole energy transition story losing momentum. Of course you'd have to evaluate various other aspects such as team culture, comp, etc.
Worked at a infrastructure fund right now. It's much more chill than sell side infrastructure fund. All the technical modeling stuff from above is all true. The nice thing about buyside modeling is you don't have to build your own model. The sell side gives you the model to make adjustments. A whole lot more easier in my opinion. So from that perspective is a lot more chill and less hours heavy, because building one of these things is a huge time suuuuccckkkkk.....
i've had the opposite experience, we don't take banker models seriously and have our own underwriting model which is based on our own assumptions driven by diligence etc.
i.e. depends on the fund.
What type of fund do you work for? Interested in knowing if some specific shops push to build in house models and what are the merits of this approach?
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