Infra PE from Global Macro HF - Nontraditional Background
I’m trying to reason through the difficulty and likelihood of lateraling from a generalist research / junior PM seat at a startup global macro HF into infra PE.
I have a nontraditional background.. Undergraduate Mech Eng / Math from Top 10 target school. Career started out in credit/MBS trading at GS, went to go work at material science startup trying to make a 100% sustainable shoe, then to a boutique consulting firm ran by former MBB partners in the financial services practice. We did some work for a couple of HFs, one of which poached me to do strategy and ESG integration work. Left with two other guys to start our own fund, and have been doing generalist cross-asset research and running small sliver of the book myself.
My question is this — I have no traditional modeling/IB/M&A experience, but after covering latam utes I saw how juicy real IRRs could be in EM infra and am exploring a move considering our fund may be winding down. I initially was considering something like a two year post in a developing country with IFC doing infra investing as a way to pick up some industry knowledge, but I’ve yet to encounter anyone who’s done that or sees that as useful time spent. I also spoke with a peer at Stonepeak who said they normally hire people with transaction experience so I feel like I’m at a loss. I’m 30 and worried that I’m soon to age out of any junior/lower mid-level seats anywhere, let alone infra PE.
Any thoughts on the likelihood or ability to make such a transition? Very open to ex-NYC roles.. have an in at CIP but don’t know where they stack up or how to even vet for generalist platforms where I could get a broader education for a few years.
Who are the biggest latam players? ISQ?
Thanks for the help.
I agree with your Stonepeak friend, somewhere between very difficult and downright impossible. Sorry to be a downer, just don't think this is going to happen and not worth a ton of energy or weird downstream moves to be honest.
I'd say this could be done if you had 2 years of IB and had done ~1 year at HF and decided not for you, but you're old enough you'd be looking at senior ASO/VP seats, and it sounds like none of your career really sets up well for these seats - especially being at a small no-name fund that is winding down. I'd focus on exits more complementary to your skillset in trading/research.
Transaction experience is king in PE, and even for a smart, interested candidate no one is going to have the resources to train you on that at VP level when your peers all have 4-5 years of deal work on their resume. Infra modeling is about as complex and granular as it gets, so heavy modeling experience is doubly important in this space.
FWIW, CIP is a very strong shop so if you have someone who can sneak you in the door there, great place to be. But unless the connection is immediate family I would be surprised if they'd hire someone with no comparable experience.
Agree w all this and would also note that EM infra IRRs aren’t as good as they appear, especially in renewables
Hopefully a silver lining
Thanks for the feedback, this is the general sense I get too. I'm late to the party and would have to take several steps back to get in line, assuming anyone would hire my profile to begin with. Guess we'll see on CIP if I get more serious about pursuing it...
We're not actively winding down yet, we're actually in discussions with a MF for a buyout to come internally and manage an EM book for them... I'm just having a mini existential crisis about what I'm doing with my life and hedging in the case that buyout doesn't happen and we do wind down.
Given no transaction experience what appeals to you about EM infra beyond return potential and potentially needing a job?
If it is the EM angle you will have a better chance pivoting towards some em fx/rates type roles- your education + gs + hf is enough assuming you have some EM flavor in your background.
or is it that you decided you are more of a corporate/3 financial statements person than macro? If this is it I would suggest pivoting into something EM credit related on the portfolio management side. You will prob have to sneak in via the macro/trading side but an ideal outcome could be becoming an EM Corp credit pm. Would have to learn som semblance of fundamentals but wouldn’t be dinged as much for lack of transaction exp, and credit trading/macro as well as some consulting background would be valued. Would play up understating banks as a top 3 em Corp issuer with utilities and energy. This would presumably leverage your pm/macro/trading while satisfying your Corporate interest. Could get into firms as a quant strat, execution trader, associate pm etc and then try to pivot…or what would be bigger stretch but possible is try to get in as a utilities covering analyst. Then use that plus trading to try for PM later.
If it’s the high returns you’re after well a lot of other options.
Happy to expand further if helpful
I'd echo this suggestion of applying to corporate credit markets roles - that's a potential backdoor, especially if they have a team that does fundamental work that you could jump to which you'd gain "modeling chops" to market if you're deadset on getting to PE. Also consider private credit (as i mentioned in my comment further below).
Yeah love this advice as well. Feels like if you targeted emerging market Corp credit they’d value your macro background and you could more easily pitch “I was much more intrigued by the emerging markets Corp ops I came across as a macro researcher”
This is super helpful, thank you.
I think the interest is three-fold (maybe more)...
(1)at a meta-level, infrastructure is so under-invested globally that the capital required to reach stated government goals ensures there will always be work in the space, and
(2) maybe more personally, while I think we're actually entering a paradigm where it'll pay well to be in a macro seat, the work feels too far removed from a tangible outcome or objective for me to be interested, and perhaps my current experience has made me a bit jaded about it. Macro investing is supremely interesting insofar as it relates to reading global tea leaves, but there is no finality to it. I've long been interested in the idea of developing "roads and bridges" in places where they're needed for both investment and human returns.
(3) EM broadly is interesting to me, but I think my macro view is this century will provide excellent opportunities in Latin America specifically for a myriad of reasons.
I may sound stupid saying this, but I am trying to optimize for learning environment and legitimate interests in my next seat than all out return potential. We're in discussions to be bought out by a MF, but I honestly don't know if the scaled pay would be worth it to me at this point in the event we're able to secure the deal. However, I am realistic about my age and skillset and don't want to anchor to something impossible (and I realize how much worse WLB will be in a PE seat vs. my current seat)
It is possible but your route would likely be MBA and IFC. High cost and no guarantee it would work but has been done- see famous poster brotherbear who went from em macro to pe and vc via mba I believe.
I just think you could scratch the itch less costly ways-
1.) if you want moe job security start the slow pivot to pension/insurance/long only
2.) if you want tangibility you could go the corporate route I’m describing as a little more project feel than UST flows. Pursue some of the industry related non profit if you need more
3.) no pushback on latam but would be exposed to that through other routes
also talk to some folks about how actual infrastructure deployment in EM works- in terms of cost/time overruns and related impact. Suspect a lot of disappointment
A personal counter example to some of the comments above. They are very correct but it is possible b/c I did it. Here's the ridiculous path it took me.
Credit at BB >> Boutique M&A >> O&G midstream Opco (heavy technical modeling) >> Corp Dev @ 2 tech companies >> Infra PE.
I definitely took a path of most resistance but it's possible. Here's the pithy cliché line: never give up, anything is possible!! [insert meme].
All joking aside, if you can prove you have the skills, knowledge, and ability to convince the hiring manager to give you a chance then that's all that matters. However, acknowledge needs to be made that with your experience it will be a very rough mountain to climb given the unique nature of infrastructure.
Thanks for the encouragement.. going to tap the rest of my network and see what other feedback I get, but don't think I will give up without giving it a fair shot.
How is this a counter example though? You had multiple M&A related roles before you went into PE, which is the piece that everyone is saying that OP is missing...
maybe a smidge more context (not trying to dox myself here w/ my resume). Credit isn't a transactional role in the M&A sense, boutique was 60% was pitch b*tch, it was a sh*t no-name firm, corp dev roles ended more strategy oriented where 0 deals was done due to markets being dead from pandemic. I got my current role by leveraging the midstream opco experience & modelling technical skills. At face value, the titles should indicate transaction-oriented M&A roles but really it wasn't. But hey you don't hear me complaining, still ended up in infra PE. Hopefully this helps a bit more.
Extremely tough move to get to PE from markets but it's possible. Have a friend who navigated markets to a PE seat but it's very difficult. Typically involves taking a step back and doing IB for a period of time and then jumping to PE. I've seen it done but they were probably 4-5 years younger when beginning the transition to "deal world" from markets. Navigating a switch away from markets will involve ppl in your network sticking their neck out for you since markets is a very niche world when compared to M&A/corporate finance.
I'd urge you to open the aperture of opps that you consider to switch to deal world. Have you considered private credit? Very hot asset class with lot of AUM going that way. I'd imagine there are open roles and the underwriting is much different than PE (more lax) so perhaps they'd take a shot at a markets person *if you have a connection.* You could potentially parlay it down the line to something on equity side.
By far your biggest difficulty will be your age combined with lack of experience in deals because what level do you come in at? Associates generally 24-25 so how would the chemistry work with associates and with VP's who you'll work for who you might actually be older than? Why would a firm take a risk on that profile? That's the toughest part to switch as you get older. Hiring team can find an easy excuse like that and find someone with a more traditional resume. You will have to target smaller firms that don't do on cycle recruiting and one's where you think they'll give you a legit shot.
All in all, it's an extremely hard move to make but not impossible if you push ppl in your network to help + consider a variety of roles that get you in the zip code of where you want to go. Unfortunately 30 is a tough age where ppl will be less willing to give you a shot since they can always get someone younger who will be perceived to be more moldable and hungry, fairly or unfairly. Don't be discouraged by these ppl and push as hard as you can when you feel you're getting a legit fair look from a firm despite nontraditional background. Best of luck
The second biggest issue will be your story - how'd you get to 30 without any deal experience role and just now want to make that switch? Again, there are reasonable answers for this, as I know from my background and friends, but the ppl doing interviews in deal roles are 95% of the time cookie-cutter IB - PE - MBA path people who won't give you benefit of the doubt. You have to make the story make sense somehow. Perhaps a midway point in a markets-facing fundamental seat could get you there.
Op why do that, when good Macro Guys at Pods seem to clear bigger packages than their L/S Equity counterparts?
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