Saw that they raised a monster fund recently. Any sense for how they’re doing compared to other major infra players? How would you think about working there vs. say GIP or Stonepeak?

AUM is great and all but track record, access to deals and execution is important. From the MFs side, in terms of quality deals, I think Blackstone and KKR are certainly top tier. Not really sold on Carlyle, Ares and Apollo (whose 'infra' funds are predominantly power-focused). KKR is growing their presence in Asia which is something that I haven't seen Blackstone really build out (based on public info). That being said, as someone within the space, I'm fairly confident the MFs are generally not in the same conversation as Brookfield, ECP, MIRA and GIP.

This is a great post. What do you think about renewables these days? I work at one of the funds above and we're finding it pretty difficult to be competitive because there's so much lower cost of capital money in the space and batteries usually require a lot of power price risk with a few exceptions because of RFPs for contracts related to RPS standards.. Are you seeing similar? I would love to do more renewables, but it's hard to hit a 12% plus IRR unless you're acting as a developer and selling down..

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With renewables, its highly unlikely to find operating assets yielding above 8% IRR. Some funds have been creative here by structuring JVs (or on the funding side) and have been able to boost their returns above that. Presently, I think operating renewables in the US is a core infra play.

Prominent infra players are now more focused on getting development exposure which tends to yield above 10-11% with additional upside on sell-down (if yield compression persists). With development, the key decision is what level of risk are you comfortable with mid-to-late stage seems to the norm with early stage development providing a notable premium.

The YieldCo play is pretty much over; just look at the take-privates that happened in the space over the past 2 years - sponsors have realized that the public market hasnt been able to fully grasp the intricacies of that model and have thus not been valuing them properly.

Platform value I believe lies with developers right now esp. those with a proven track record. If they have a focus on batteries or renewable + battery buildouts, thats a plus as this space will likely pick up significantly over the next few years (imagine the growth if similar federal incentives are offered like with wind and solar).

I definitely think there's opportunities to get good exposure here if you consider the traction energy storage and hydrogen are getting.

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