In energy, a lot of the activity is based on project financing. Obviously there are the usual PE/HF type exits, but does anybody have knowledge about this field? I believe JP and Barclays are the two huge players in N.A. project financing for energy, but could be wrong and wanted to get other folks' thoughts. Is it a viable exit opp from Energy IBD? Is the work model intensive or just paper pushing?
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PF is a lot of (hard core) modelling at junior level, but at VP and above it is much more about winning mandates, defending transactions in front of credit committees and supervising legal documentation negotiations.
It's a very interesting and broad area of banking. You obviously gotta have very good finance background, but you also need to have significant legal (often gained on the field) and technical (many PF people are engineer + MBA) competencies.
Biggest players in that field are european and japanese banks.
Makes sense. If one were to aspire towards junior level opportunities, would it be preferable to do business development for an energy company first? Just trying to get an idea of backgrounds of people in this space. I've definitely seen a lot of engineer + MBA types. Yale and Stanford seem to have the best energy/MBA joint programs.
there are a lot of firms getting into this market. I would say most are not major firms however
Coming in as an analyst, are the PE/HF exit oops significant? Obviously not as much as M&A but how about compared to Levfin/DCM/ECM. Is the pay also similar?
I have the opportunity to join within a European bank and am wondering if this is a worthwhile opportunity and if it is on par with M&A/ levfin/ ecm
Don't know if this is "on par" with M&A from a bonus perspective.
However work/life balance in PF is way better than in M&A, and I believe the job is more interesting there for a junior. As a junior in PF you will be involved in all steps of the transactions and will quickly build a nice portfolio of competencies, wheras in M&A your scope will be much more limited. This is not unrelated to the fact that PF teams are usually quite small with very few juniors (on the contrary of M&A where you have armies of Analysts).
One of my good buddies who was Energy IBD went to work at FirstSolar doing project finance. Loves it: great hours, pay, and actually doing something useful for the world. Stay away from wind farms. They are dropping like flies: http://www.startribune.com/business/106490454.html
Agree with Igo. hours are better and you usually work on a bunch of live deals. Additionally, they often work with a bunch of different groups (power/energy coverage, lev fin, private placements, leveraged loans, etc.). Exit opps are definitely to PE/HFs but most PF groups are small so you need to be proactive with the headhunters and such.
Exit Opps - O&G IB (Originally Posted: 03/31/2010)
Hi everyone -
What are the typical exit opps for analysts coming out of energy IB? (Mostly E&P and asset sales).
Thanks!
plenty of firms in town.
IBD Energy Sector Query (Originally Posted: 01/26/2014)
Hi all,
Can anyone please point me in the right direction for someone trying to understand more about what goes on behind the energy IBD desk of most bulge brackets?
Cheers all x
There's a lot of info about this if you use the search function. But, I'll give you a quick rundown assuming you mean banking and not trading (your use of the term "desk" makes me unsure which you are referring to)
1) Yes - modeling midtream MLPs and E&P is much different than modeling a generic EBITDA company. With MLPs you model the distribution to shareholder through a waterfall and in E&P you model out the use of reserves. Additionally, different multiples are used. Midstream you look at multiples involving distributions and in E&P you look at multiples pertaining to reserves. While Midstream may seem similar to other industries because it is just measuring distributions (much like cash flow), it is different because the nature of the MLP structure means that there are set tiers, etc that the capital flows through and so you have to build this in. 2) You should have an understanding of the the oil and gas commodity market. This will be important in building models and in the pitch. 3) shoot me a PM
Natural Resources (Oil and Gas) IB? (Originally Posted: 10/04/2012)
I've been speaking to a BB Oil and Gas desk in Calgary, and really hope they'll give me an interview. Either way though, what are the general thoughts on natural resources groups, particularly in oil and gas? The analysts I've spoken with say that the upside is that there are almost always deals. Other than the M&I oil and gas modeling course, what are some good ways to learn more about the industry?
Read "The Prize," Deutsche's Oil & Gas Primer, and filings and investor presentations for o&g companies. These are the best free resources available to you.
^ in Calgary.
There will always be O&G deals in Calgary but not that many for BB given that they really only work on the bigger cross boarder deals (CNOOC/Nexen, Sinopec/Daylight, PETRONAS/Progress) or debt. Even then they are typically buyside so theres quite a bit of intervention from other groups (lately its been asian buyers).
Also unlikely to get a slice of asset deals since BBs don't have A&D teams filled with geologists and engineers.
Basically there will be a lot of elephant hunting. Upside is that as an analyst, you'll be paid more than your peers in NYC/London and have more stability (the office will be run fairly lean).
Thank you! I'll definitely be in touch if I land the interview.
Just out of curiosity, why higher pay?
In the past most BBs adjusted the pay for Canadians based on the exchange rate (when it was ~$0.6USD = 1 $1 CAD). The exchange rate is on par now but they haven't moved the conversion yet so there are a few shops out there paying 92K base salary. Total comp is pretty much the same though across the good shops in town.
Wow. That's awesome. Man, I hope I get the interview :)
Energy IBD to PE (Originally Posted: 03/17/2011)
So, I will be heading to UT next year and from what I have gathered on this site most of my exit opps will only be in energy. I was wondering how hard it will be to break into corporate PE after an energy ibd analyst stint. Thanks
People go to New York
There are energy focused PE shops and generalist shops that do energy deals
First Reserve is probably the most reputable energy focused PE shop
exit opps from UT = energy job? that's the first time I've heard it used in that context hah
Wait, so you're a year away from starting undergrad and you're worrying about exit opps 6 years from now from a job you don't have?
I may have confused y'all with the topic title. I should have put Energy IBD to Corporate PE ie: KKR, Blackstone.
Edit: @Jeff - i'm just curious...
I didn't even know what IBD was when I was starting college. I thought "investment banking" was something that went on at every local bank branch. Also "investment bankers", to me, were people who sat around buying stocks all day.
I didn't even know what IBD was when I was starting college. I thought "investment banking" was something that went on at every local bank branch. Also "investment bankers", to me, were people who sat around buying stocks all day.
KYS = the most effective exit op
First off, chill out have a beer and make some friends at college.
Second, there are energy-focused PE firms (First Reserve is a good example) but regular corporate PE firms regularly bid on energy-related assets. KKR and TPG bought TXU (not that it's going great) and BX recently bid on Dynegy.
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