Infra/Energy Advisory Modeling case examples
Hi all - trying to prep for the typical infra / energy advisory IB 90-120min modeling tests for an analyst internship at a small shop. Would love to practice with real case studies people have actually gotten in interviews. Looking for actual solutions to get familiar with the modeling. I honestly don’t really know what to expect or what is typically covered in these but other sources i checked seem to be too complicated for these. Want to be able to cover anything from toll roads to solar wind farms. From what I heard, these tests typically tests valuation, debt, operation expenses/cashflows. But again I’m not sure. Please and thank you!!
BIWS project finance course was a lot of help for me and prepared me well for modelling tests. For all the places I interviewed, the modelling test was an operating solar farm acquisition using leverage
The project finance course goes deep into construction and debt modelling, which is important for the sector, but I doubt you will be tested in construction. That being said, if you can understand that, and more importantly the debt sculpting approach to PF / infra modelling, you’ll be gravy for the actual test
This is helpful. When I see courses that emphasize project finance, I’m confused by that and feel that it may not prepare for IB infra/energy advisory tests specifically because I’ve heard some banks say that their infra teams are focused on project finance and other infra banks say “we do m&a” not project finance. But essentially you still feel the course prepared you for all the different types of infra related modeling tests? Are there areas you feel should be prioritized over others? Like what mechanics are mostly tested and how many hours do you think you need to put in daily to be really set for the tests?
If you can give any contexts to the sort of platforms you interviewed at that would be super helpful too. Sorry long comment but thanks alot!!
It sort of depends what your team specifically covers, but most teams nowadays are super power-generation focused, which makes most of your transactions asset-level. for operating assets, the key metric is cashflow available for debt service / CFADS, as that determines how much debt the project can handle
Unlike a lot of other sectors, cashflow visibility is super high in power & infra, as most of these projects are under long-term contracts that lenders view as a low-risk bet. As such they are also high cash-yield, and attract lower cost of capital investors, especially for operating projects. It's for this reason that valuation is more DCF focused than other sectors, and why if you understand the debt structuring behind development and operating power assets, you'll get the crux of how they are valued
When people say their bank "doesn't do PF" they probably mean they either a) don't have a balance sheet support a PF team that invests the bank's dollars or b) focus exclusively on M&A advisory
In the case of b) , some shops do PF advisory (different than a, which is direct lending for construction projects), where they will help structure debt and raise equity to support the transition of a development asset into construction. But these are longer-term, harrier deals, and M&A processes are what you'd prefer if your shop has the prestige to forego PF. That being said, getting exposure to both PF & M&A in my eyes is something more relevant nowadays, as with all the AI-driven demand, the industry is trying to fund a buildout of power assets that hasn't been witnessed in decades (or maybe ever if the bubble doesn't pop), and a lot of these speculative developers will need advisors as they evolve into mature platforms
Bit of a mouthful, but point being the BIWS goes into infra debt a lot, and that's sort of the first pillar of valuation (at a high-level) for operating infra assets
It depends when your interview is but if you have a week i think you should be fine
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Have a few examples, feel free to p.m.
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