Infrastructure Investment Banking

PowerMonkey:

All three have devoted groups to infrastructure that are quite strong.

Macquarie pretty much only does Infra, so they have to be good at it. Also, it basically is an infra PE job.

Maybe in America, but elsewhere they're much more active in other areas.

There are two distinct groups at GS with regards to infrastructure. The group you mention used to be the municipal finance group but after Mark Florian, who headed that group out of Chicago, successfully advised the City of Chicago and the State of Indiana on toll road sales they moved him to New York, made him a partner and changed the name of the group. They primarily focus on advising governments on sales of infrastructure assets such as toll roads mentioned above and the state lottery systems in Illinois and Indiana.

However, GS knows better than anyone that the real money is on the buyside. So they raised a ~$6 billion infrastructure fund called Goldman Sachs Infrastructure Partners (GSIP). GSIP is separate to Florian's group and sits within Merchant Banking rather than IBD. When GSIP does deals, Florian's group acts as advisor. GSIP has been extremely active and have invested in ABP (UK ports operator), Carrix (US ports operator), Mexican toll roads, Kinder Morgan, TXU to name some. They should soon be raising a second fund.

Gianpiero:

How much experience is needed in PF to land a job in infra funds? does a MBA help?

Also interested. What’s the recruiting process like for these funds? Do they use headhunters to reach out to Public Finance analysts?

Sean Kingston:

Hello,

Thanks for sharing your great information. In my point of view Ws-Ibank is the best infrastructure banking than the other investment banking.

Thanks a lot ws-ibank.com

HSBC, RBC, UniCredit, Big 4, SMBC, CS. please note that this a mixture of PFI banks and M&A advisory who service your Balfour Beattys, Veolias etc..

a few of the BBs have infra funds such as MS, JP in addition to your GIPs etc..

Thanks! Great info.

Does GS, BAML, or Citi have much presence here? And reputation-wise, I would assume the BBs are at the top?

Rothschild, Lazard and so on are at the top. Those fellows are at the top for trading.

i am curious to know which banks in London are strong on the M&A/advisory front, specifically in terms of power/utilities/renewables and social infrastructure, don't know too much about the M&A side of things

i know in terms of project finance lending and advisory, french banks are pretty top notch (both infra and energy), especially SocGen, i've also seen HSBC consistently at the top, RBS was but not anymore.. in terms of lending, it seems to be the european and japanese commerical banks, like hsbc, the french, japanese banks in terms of advisory, i know it was more of a big 4 thing, but now more BBs and other banks are active because of the overall cross-sell economics, like hedging, bonds, etc.

Will infra funds actually look at commercial bank project finance lending experience, or strictly have greater preference for bulge M&A candidates ? i look at postings and they always seems to say, will also look at project finance backgrounds, as if its a secondary choice, i'm guessing it depends on the fund.. GIP vs something like infrared

also is it common to go to a development bank like EBRD, IFC, ADB after a few years ? i can see decent hours, solid base and benefits with little or no bonus, possibly interesting emerging markets work, but the politics/bureaucracy is a nightmare ? any other pros/cons ?

In a tight credit environment, I would argue the best project finance experience will be with whoever has balance sheet power as those institutions will drive the transaction process. As soon as a bank isn't able to back pf deals anymore, all your idle project finance bankers will be eager to jump on painful financial advisory mandates for the sake of keeping themselves busy - not to make money.

Long-lived assets, small but stable cash flows, boring Australian sponsors. That's it.

Thanks a lot. Sent a banana your way.

No problems oomp _loompa

I work at a small infra/energy shop in South Florida.

Macquire is also heavy into it as well

I don't know anything else about this firm, but it looks like it fits your criteria: http://www.fpcg.com/

Depends on firm. Which firm do you want to know about?

Does anyone have any information?

what instiutions? banks? sponsors? municipalities? contractors?

Whoever the buyers are, pension funds mainly I guess.

buyers? okay, so i guess you mean the equity which could be a pension fund, a PE fund, a contractor, a bank. But there is also debt, which could be all of the above bar the contractor.

okay so how to equity source a deal. the contracting authority will advertise a tender for the project, consortiums (which will be made up of a combination of the above parties) will bid to win the project in line with the tender guidelines and the lowest NPV will normally win.

you have to remember that they wont own the infra, they didn't buy it. they own the contract to build and operate it but they wont own the hard assets. these will be the property of the contracting authority. (this is based on the PPP model). airports (and ports in the UK) are generally different, they can own the assets in some cases

Are there any orgs that specialize in being intermediaries for the PPP deals? Or is usually done direct from government to contractor to the equity source?

Infra isn't too big in the US, we are behind the curve, but it is certainly catching on. A hot spot right now would be Brazil for infra between the World Cup and the Olympics coming in the next several years. Some of the biggest investors in infrastructure right now are actually the big Japanese banks. There aren't too many PPP (PFI in the UK) funds being raised right now globally, but Macquarie is a pretty well known fund manager when it comes to this side of infra, as is OFA Infavira and Edifice Capital. Then of course there are the firms everyone knows, like Barclays, BlackRock, and UBS who will have infrastructure investment arms as well.

what makes you say these people sit in PE?

I was also wondering about the same thing. Anyone have experience in this field?

Depends on the bank and how active they are in the infrastructure side of things rather than muni. Goldman and Morgan Stanley, I would argue, have had the most success turning their public finance groups into infrastructure groups both on the sell-side and now on the buyside. Goldman recently raised $6bn for their infrastructure fund which is advised primarily by their infra/muni group. Morgan, CS, JP Morgan have raised funds as well with ML and UBS becoming more active on the sell-side.

In terms of exit opps, all the funds above are options as well as pe funds that have jumped into this space like Carlyle.

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"We paused and chuckled together at the notion of Municipal Finance, wading in the pathetic image of some dude convinced he was saving the world, one shitty Iowa hospital bond deal at a time."

bump

bump please

It sucks. What more do you need to know? There's a reason no one is replying.

Macquarie has a great infrastructure group