IB P&U vs Infra Project Finance Teams for Infra PE Recruiting?

There seems to be a fair amount of confusion when discussing infrastructure, infra banking, power & utilities banking and what each of these entails, so just sharing for the benefit of all.

Power & Utilities IBD -- covers the full spectrum of this industry. What are some examples of transactions that a P&U banker might work on?

1. Large utility debt issuance (most common, most boring)

2. Corporate M&A, i.e. one large utility buying another -- Exelon buying Pepco as an example. These types of transactions do not happen as often, are subject to significant regulatory approval and most analysts do not get exposure to them.

3. Individual Asset Sale -- while only a single power plant, these transactions can be quite large ($1bn+). This would most commonly involve a sponsor selling an asset in its portfolio the advisor would work for the seller.

4. Sale of Portfolio -- large corporate divests its generation assets. For example LS Power buying 4,000 MW generation portfolio from TransCanada. These can be conventional (coal/gas) portfolios or renewable portfolios as well and advisors are hired by both the seller and the buyers.

5. IPO of renewable player. Less common, but SunRun going public back in 2015 would be an example of this and would be led by the P/U teams at the respective banks on that transaction (CS, GS, MS) (likely in tandem with the tech teams).

Infrastructure Banking -- this is a very broad term, and this sector is generally lumped inside of other sectors from a coverage perspective, be it Diversified Industries, Industrials, Transportation or in some cases a small and dedicated Infra IBD Team. I've not heard of any of the larger banks having an "Infra" team. JPM has DI, MS has Transportation (which also covers airlines and auto), GS this coverage is all mixed across industrials, power, energy. Coverage would include the rest of the infrastructure sector, specifically rail / transport, airports, roads, telecom towers (if not covered by M&T group), water and waste infrastructure. There honestly aren't that many deals happening in most of these, particularly of any substantial size, which is likely why you don't see dedicated "infra" groups at the BBs.

Infra PE Funds -- this can be broken into general infra funds (GIP would fall under this category) and energy infra funds (First Reserve would fall under this category). For the general infra funds, they will cover everything, and therefore recruiting could be from an Infra IBD group (if it exists), a Power & Utilities group or even a natural resources group. That being said, a significant portion of the deal activity in general infra is on the energy side of things (O&G or power related). For the energy focused Infra funds, they will invest in assets related to power as well as upstream oil and gas to midstream and downstream, including resources, equipment and services, and associated infrastructure. They will bid on individual assets and portfolios of assets. These funds often have an East Coast and Houston office and divide their team into power / oil&gas, with the O&G team coming from a natural resources IB background and the power team coming from a P&U IB background.

Hopefully this clarifies some of the differences between these teams / groups and how coverage works. If you want to be at an infra fund, the most sure bet is to work in a P&U group or natural resources (Houston). After that general industrials or M&A would be the others to look at. No harm going into an infrastructure investment banking team at RBC, but you'd be doing yourself a disservice by trading down significantly in brand quality to cover that sector.