Renewables Project Financing to a Credit Fund?
Hi WSO,
Hoping to field some opinions on this topic. Currently working at a Renewables-focused advisory shop, and our bread and butter is project financing renewables projects (mainly Wind and Solar). We don’t have a balance sheet like a lot of French / Japanese banks, so we take on an advisory role in relation to financing / structuring / other strategic advice. Wouldn’t say we have a brand name, but we also get mandates on some fairly prominent multi-billion dollar M&A deals now and then.
Through my experience, I’ve loved the project finance / debt related experience, and would like to say that I’m getting fairly proficient on that aspect of the job (re: modelling on PF-focused topics like sizing / sculpting etc).
That being said, I’m at odds as to whether I prefer the Power / Renewables side as much as I do the debt side, and have been thinking about my next steps. I’ve chatted with a few friends at BBs (mainly in DCM / Lev Fin / Structured Products and PUI) and they feel my skillset would be quite welcome there. Have also been chatting to friends at funds - ranging from the MIRA/GIP-style infra buyout funds to smaller private credit funds.
My takeaway is that the buy-side credit roles do appeal to me the most from what I understand, particularly in relation to structured / alternative credit teams. I think this is mainly due to the complex / esoteric nature of the area.
I will say that I’m not married to the idea of leaving - I have a great job in terms of deal exposure and reps, great culture at the firm and paid pretty decently too. Think being at this shop has allowed me to get a much more “complete” transaction experience, and was partially the reason I didn’t go back to the BB PUI team I summered in (hence bit apprehensive about moving to a BB).
Wondering if WSO has any views on this move / other general advice on the transition.
Analyst 1 in IB - Ind, sorry about the lack of response. Maybe one of these topics will help:
More suggestions...
You're welcome.
bump
Infra & energy debt is becoming such a large institutional asset class - if you enjoy the sector then there are many options to check out where you can not only leverage your product but also industry experience. Unless you hate the industry, why not check out various opportunities with players investing in this space?
Appreciate the comment, and have considered infrastructure debt funds / teams, but have (perhaps incorrectly) held the view that these funds have more vanilla-style debt. Even what’s considered “Infrastructure Mezzanine” is different to regular mezz from what I know.
That’s why I went down the credit fund thought process, as it would give me an opportunity to work across a broader range of debt securities. Would definitely say I’m still a fan of the industry and the equity side as well, hence the conflict
Bump, can’t help but any option you decide looks to be interesting, you seem to be in a great spot. Mind if I PM you?
PM’d you :)
I think this distinction about complexity is really arbitrary and unhelpful. You can put together a mezz financing in a week with simple documentation or spend a year toiling on the most convoluted and painful project financing. There are levfin deals that are basically just vanilla corporate lending or you can find the most obscure esoteric securitized asset class out there.
I'd try to understand what it is that you enjoy about your exposure to debt products. You mentioned modelling, but do you get involved in the structuring and documentation? Do you enjoy the process of working with the issuers and digging into their underlying operations with them or do you prefer to take a more high level analysis instead? Maybe you like the part where you deal with investors and navigating the institutional side of things a lot more than working with corporates/issuers etc.
Appreciate the comments and yes, I think there's a degree of the "grass being greener" on the structured products side and perhaps a bit of naivety on my part in my understanding of it. Some of the appeal is in the complex/technical nature of the field, which is similar to what drew me to infra in the first place, but admittedly not a profound reason
On debt, we work on the structuring and documentation alongside the strategic advice we provide. Think the appeal to me is on the structuring, and helping get financing for fairly unique models (like funding fully merchant basis assets)
We also do some principal financing (smaller cheque sizes for projects that are more early stage, not as much of a focus), and working on this has pushed me towards the buy-side, but has been hard to distinguish whether I prefer the debt or equity side
Would you consider sharing the name of your firm or comparable ones / competitors?
PM would be easier - can’t say I know of direct competitors to us given the nature of our biz model + geography focus
Updated comment with username if you wanna pm, thanks!
Don’t think I can see it haha
Don’t think I can see it haha
My personal advice to you is to follow the technology (if you like it), ie. find banks that do frontier asset classes (H2, batteries etc.), as docs, legals, models and processes are the same really - the “IT” factor is on technical DD in my opinion…
Out of curiosity, do you work at a bank or a fund? I also work in PF (with the bread and butter stuff), but have been really curious about H2 and batteries. However, I’m not really aware of anyone doing the frontier stuff.
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