Why Project Finance?

pizza47

10mo

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

Analyst 2 in PE - Other

10mo

You're not wrong, but this list feels a lot closer to Infra PE than PF. If you're going for a PF interview, would strongly recommend not talking about deals with developers or working directly with them, or investing in common or preferred equity. Travel also varies a lot.

Authored by: Certified Private Equity Professional - 1st Year AssociateCertified Private Equity Pro

pizza47

10mo

Most Helpful

This is literally what I do on a day to day… we’re not investing, but we’re the ones selling it to the infra PE investors. Right now most of my deals are with projects still in the development stage with two of them being just ideas right now. So yeah we work with developers a lot. Usually start with development equity and hopefully they’re successful enough / our seniors keep a strong relationship and they pick us to finance/underwrite future transactions for them as they mature.

It is different than most of PF at banks like SMBC/BMO/HSBC/CIBC which do a lot more pure lending / syndication type stuff in the PF space. Our PF group is much more like an IBD coverage group in terms of skillset and function, and has more of a skew towards equity private placements comparatively

Investment Banking Partner JD

Incoming Analyst in IB-M&A

10mo

joining an infra advisory m&a, mind sharing your experience within the space? So far how has it been, WLB, exits etc..

pizza47

10mo

PM me

gingerbot2000

8mo

Can you please PM?

RealEstateNerd

10mo

Solid list. Sounds exactly like MS PF.

It is what it is.

Analyst 1 in IB - Cov

10mo

Curious about what you’ve said given the long lead times across PF deals from experience.

How does your group pick out which developers to approach and how can you guys generate revenue if you’re just working on an idea rather than the execution of transactions?

Retainer or lump sum fees?

ProjectFinanceGuru2020

10mo

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

Yesssssirrrrrr

10mo

The WLB is great in my proj finance group. Little to no weekend work and i could honestly make dinner plans w friends during the week most nights.

Authored by: Certified Investment Banking Professional - 3rd+ Year AnalystCertified Investment Banking Pro

sheldonxp

10mo

What makes it so much better than IB? Is it that the timelines are more relaxed or that there is less quantity of work? Or something else?

3 replies

ProjectFinanceGuru2020

10mo

I think it comes down to a couple reasons:

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.
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.
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.

golfing_finance

10mo

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