Project Finance Exit Opportunities?
Hi, I am a long-time lurker, and seeking advice.
Question 1:
I am a recent MBA graduate who did an Investment Banking summer internship at a respected MM bank (think HL/Rothschild/JEF/WB/PS) but could not get a return offer. I recruited the whole of my 2nd year and recently got a Project Finance role at a Renewable Developer. I want to understand how reasonable it would be to make a move to Infra/Renewable PE or IB using this role? I am confident that I will get a lot of modeling reps (including tax equity) as the team is lean, and is doing a lot of acquisitions. The MD described the role more as a buy-side opportunity, and the recruiting process was more on the lines of PE as well.
Question 2:
Though the role seems interesting and the team seems very experienced, I still feel unfulfilled for my desire to do IB at a respectable bank, for which I did an MBA in the first place. Am I being naive to keep recruiting for IB or should I accept my fate, stop recruiting for IB and focus on just being better at this job? I definitely yearn to make it to the high finance roles (IB/PE) for the prestige associated with them.
Question 3:
I worked at a no-name smaller IB throughout my MBA (apart from my summer at the MM). I got solid deal reps and a lot of modeling & execution experience here. They offered me a full-time Associate position, but honestly, the pay sucks (like really sucks), and the team is not impressive either. Is there any merit in choosing to keep working with this smaller IB instead of the PF role with the expectation to break into a bigger IB?
Other information:
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The pay for the PF role is on the lines of ASO 1 at MM PE fund but the cash bonus is capped - there are still stock options that are available for vesting. The pay is good but is definitely at a discount from the IB pay (at least for the initial few years)
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I expect the hours to be better than IB.
I could really use advice on how to think about my career, with the possibility of still making it to PE/IB.
Based on the most helpful WSO content, here's a detailed breakdown to address your questions about transitioning from a Project Finance role at a Renewable Developer to Infrastructure/Renewable PE or IB:
Question 1: Transitioning to Infra/Renewable PE or IB - Feasibility: Transitioning to Infra/Renewable PE or IB from a Project Finance role in a Renewable Developer is quite feasible, especially given the nature of your role which aligns closely with buy-side activities. The experience in tax equity modeling and acquisitions is highly valued in PE, particularly in specialized sectors like renewables. - Skillset Leverage: The lean team structure and significant modeling exposure will enhance your profile by providing deep, transactional experience. This is crucial for roles in PE and IB, where detailed financial modeling and understanding of complex transactions are fundamental. - Networking and Positioning: Continue to leverage networking within the industry. Position your role as akin to a buy-side analyst, emphasizing the strategic and financial evaluation aspects of your job in discussions and on your resume.
Question 2: Continuing IB Recruitment vs. Focusing on Current Role - Career Fulfillment: It's not naive to pursue your initial goal of working in IB; however, it's essential to weigh the potential long-term benefits of your current role against the uncertainty of breaking into IB. - Strategic Patience: Given the strategic nature of your current role and its alignment with PE activities, it might be more beneficial to excel in this position and transition to IB or PE later, leveraging your direct experience and possibly reaching a higher position more aligned with your MBA level. - Personal Satisfaction: If the prestige and work culture of IB are what you truly yearn for, consider continuing to network and keep an eye on new openings, but without compromising your current role's opportunities for growth and learning.
Question 3: Smaller IB vs. Project Finance Role - Compensation and Growth: While the smaller IB offers familiarity and a full-time position, the compensation and team dynamics seem to be significant drawbacks. The Project Finance role, despite a lower initial cash bonus, offers competitive pay and stock options, which could be financially rewarding in the long run. - Professional Development: The Project Finance role appears to offer more substantial professional growth, exposure to strategic deals, and a closer alignment with PE activities, which could better position you for a future transition into larger IBs or PE firms.
Additional Considerations: - Work-Life Balance: Better work hours in the Project Finance role can contribute to a higher quality of life, which is an important factor to consider. - Long-Term Career Goals: Align your current choices with your long-term career aspirations. If PE or high-level IB roles are the ultimate goal, gaining solid experience in a relevant and strategic role like your current Project Finance position could be more beneficial than staying in a smaller, less impactful IB role.
In conclusion, focusing on excelling in your current Project Finance role could provide a stronger platform for transitioning to desired high finance roles in the future. Use this time to build your expertise, network strategically, and position yourself as a strong candidate for future opportunities in IB or PE.
Sources: https://www.wallstreetoasis.com/forum/corporate/project-finance-exit-opportunities?customgpt=1, Renewable Energy PE Overview, Renewable Energy PE Overview, https://www.wallstreetoasis.com/forum/investment-banking/ib-pu-vs-infra-project-finance-teams-for-infra-pe-recruiting?customgpt=1, Public Finance best verticals for exit opps
Bump
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If this is a respectable developer with a pipeline of projects being developed, financed, sold, and/or acquired, this opportunity is a goldmine. Your career stock will skyrocket after 1 or 2 years in this role. I agree completely with your MD’s characterization that this is more like a buyside role, since you are the client here, deploying capital and doing M&A and potentially hiring advisors.
The key to extracting maximum value from this is to get the depth of experience that you can really only get as the client. Modeling out potential sales and acquisitions from the view of the developer or acquirer, understanding the development process extremely in depth from site control to permitting/environmental to interconnect to offtake to EPC to financing and sale, evaluating acquisition opportunities from the perspective of a prospective buyer, going through the financing process for a project. In other words, getting all of the experience and exposure at a level of granularity that it’s literally impossible for your IB associate counterparts in power groups to even touch.
A reasonable exit from this would be a top power & utilities/renewables IB group or a strong MM fund, if you extract max value and can blow people away in interviews and modeling tests (which should be easy). Some of the sharpest people I’ve sat across from in meetings with sponsors were people who spent a few years at a renewable developer. You could just tell their understanding came from literally getting in the weeds and doing the dirty work, not just reading and writing a few pretty CIMs. They were dangerous.
I agree with all of the above. I work in the space at a BB and a sizeable chunk of my colleagues spent time at reputable developers. This should be a great opportunity for you assuming the team is actively looking to deploy capital. Taking a deeper dive into the development and operational aspects projects should be incredibly accretive to your career as well.
Thank you both for your comments - this is very reassuring. Hopefully the experience is as good as advertised.
DM me and we can talk about developer quality and what that means for moves into PF / banking
Large number of developers have poor reputations
What are some reputable renewable developers you could name?
For utility-scale solar:
Nextera, EDF Renewables, Invenergy, Avantus, Apex, Origis (kinda rocky rn), Hecate
For Community Solar:
Dimension Energy, Arena Renewables, Renewable Properties, ForeFront Power, Clean Capital, Cypress Creek Renewables, Soltage, Perch, Bluewave, Solstice Power Technologies, REC Solar, Freestone Renewables, OneEnergy Renewables, SunVest Solar, Arcadia, New Leaf Energy, Nautilus Solar Energy, Bear Peak Power, Chaberton Energy, Cloudbreak Energy, ESA, Renewables America, Volta Energy, Prologis, DSD Renewables, Suncode Solar, Lightstar Renewables, Fieldworks Power, White Pine Renewables, Golden State Renewable Energy, Sunrise Mountain Partners, PureSky Energy, Summit Ridge Energy, New Energy Equity, Nexamp, Altus Power
Not too familiar with wind so can't help there
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