Why Project Finance?

Bump

• genuine interest in energy

• growing area, a lot more stuff is considered infra

• some overlap with ESG for renewables / clean tech projects

• some sense of feeling like your deals create public good / benefit

• less cyclical industry / still busy in downturns

• growth / VC - type feel for deals with developers

• ability to work with developers over a very long period of time, starting from the initial idea stage to the IPO

• see various types of deals along the capital structure (can do senior secured debt to common equity and everything in between (mezz, pref, etc.). Because of this, when one part of the market dies, you can pivot to another so deal flow is more consistent

• travel at the junior level more than your peers

Vs. traditional investment banking, I would say the main differences are the following:

• you get to actually finance something tangible and see it get built. There is a sense that you are building things that are important for society (roads, airports, power plants, etc). This is extra true for folks working in renewables.
• Work life balance is typically better than IB

I think it comes down to a couple reasons:

1. Generally, it seems like the culture in project finance is not as cut-throat. The senior folks are more laid back and care about junior team's well-being. At least where I work, we are going to avoid assigning weekend work if at all possible whereas in traditional IB, I don't think people thing twice about juniors time.
2. Deal closing timelines tend to be relatively long (2-3 months) and are partially driven by the borrower being able to deliver certain diligence reports. Delays are common due to project development issues. Additionally, there is a significant amount of legal work that goes on in the background that the finance team isn't responsible for.
3. Agree with the comment about less pitches, but there are still lots of potential deals to analyze that we don't win, which take a decent amount of time, but probably not the same amount of time as building an LBO model and 50 page pitch deck would.