Infra PE + WLB (or at least better hours)?
Hi everyone!
I'm super interested in infrastructure investing but I don't want a PE job with banking 2.0 hours. What infra PE firms/groups (including secondaries/co-invest/SWF) offer better hours. I don't mind a slight haircut in pay.
Can't speak to secondaries/co-invest, but direct infra PE under a traditional GP model tends to lends itself to worse hours vs. vanilla PE all else equal. Given the nature of infra (highly contracted + granular inputs), diligence is a grind and very model intensive.
SWFs and direct pension investors like CPP will have much better hours that are sustainable (albeit significant pay cut). MM infra firms will generally offer better WLB vs. the large cap guys, but there's significant variability firm to firm.
Any firms on the MM side known for being better or worse in terms of WLB? how significant is the pay haircut?
Idk about hours but culture at Antin in the EU is supposed to be toxic
I thought CPP basically does direct investing now.
On the infra side yes, as does a couple of the other top pensions
I work in PE infra and I never work more than 40h. Depends on fund to fund, for instance, guys at Antin, Brookfield or the likes work like there is no tomorrow but in the mid market space you have funds with good WLB.
Could you provide some names of MM infra funds that have good WLB?
I can’t believe it. Drop the name
SWF is the way to go, or niche things like secondaries/co-invest/debt I'd also throw in you're simply doing less insane diligence so broadly better hours
MM can be extremely variable and WLB is hard to fully diligence if it's a dealbreaker item for you... I'd say vast majority of infra PE will be banking 2.0 - as mentioned the modeling is mind-numbingly granular and the total diligence hours per deal versus a vanilla PE deal are probably 1.5x or more, just with all of the incredibly detailed modeling.
I would ignore the one guy here who's saying he works in PE infra and pulling <40h weeks. Generally speaking, hours are the same if not worse than vanilla PE and the culture is usually worse. Unfortunately, the grandfather of private infra investing is Macquarie and the culture there is absolutely toxic. You've got a number of funds in present day infra funds that are largely run by ex-Macquarie folks and it's usually a shitshow behind the scenes. Every notable fund in the space (GIP, KKR, Brookfield, Stonepeak, ISQ, etc.) has terrible WLB and the ones that don't (CIP, chilling as Europeans tend to do) are ones you don't want to work at anyway because it won't do much to boost your learning/growth trajectory.
What's wrong with CIP? Just bad from a junior perspective or are the returns not good?
Agree with most of the above. There's been such a large inflow of capital into the asset class with growth seemingly more concentrated at the "mega" end of the spectrum. Given the large capital needs for deals, it's just a lot harder to play at the LMM/MM end which in turn somewhat limits the spectrum of what's out there (in terms of better WLB, team cultures, etc) or morphs into more traditional LMM/MM PE and/or infra tech etc plays. Used to be more fun, but everyone got bigger and greedier.
To add, if you're starting to expand your search to pensions and swfs then why not also look at development platforms, strategics, independent sponsors etc... Comp divergence may not be that big anymore and could be a lot more interesting/fun.
so something like DESRI at DeShaw?
These responses are all a bit binary.
WLB varies wildly even within firms - different funds/strategies, by the nature of their work, tend to be more granular / work "harder". The modelling for a brownfield asset with contracted cashflows where your investment thesis is to boost buy-and-hold IRR by 100bps through operational improvements is obviously going to be more granular than funding a greenfield renewables platform, where all you have initially is a team and pipeline.
I am in London and the only places I have heard for sure are sweatshops are GIP, BX and Brookfield. BX makes up for it by paying frankly stupid money though, not sure how comp at GIP works. I know many at Macquarie infra doing great, so maybe things have changed.
There are a plethora of MM funds and more and more cropping up regularly. The opportunity set in the MM is large - with so much dry powder being raised by the big boys, they need assets to buy, which are often developed/sponsored by MM funds. Sandbrook, Tiger, Icon, Ancala, Arcus, Infrared, 3i, etc etc. The one thing I will say is in the current fundraising environment, these guys will struggle as capital flows to the top first.
Similarly on diligence being a "grind" - we leverage technical advisors extensively, and the big shops have in-house ops/technical teams who focus on that side. The investment professionals time is spent as with any other sector - valuation, structuring, negotiations, asset management. We aren't sitting there debating P50 irradiance as that's not our job - we have to trust our advisers or nothing gets done. Also, if you engage a financial advisor on a deal, you can work with them to build a functioning operating model as the modelling is so commoditized and standard in infra, and all based on contracts etc. Obviously they can only help so much though as your valuation is proprietary etc.
SWF's and pensions can be great seats, but don't have much direct knowledge myself. The Canadians are all very well regarded though, as is GIC. I would personally avoid large insurers doing infra.
I'm very interested in this space and am looking to eventually transfer from an infra niche to a SWF/pension-style firm, but why should we avoid the insurers? Additionally, do you know anything about the Australian superannuation funds (e.g., IFM, etc.)?
IFM seems like a good shop, pretty active. Don't know much else about the aussies.
Why are you only interested in a SWF/pension? Some GP's have great WLB's (for the industry lol). Insurers I think pay lower than market, but I could be mistaken.
I'm working with a Scandinavian renewables fund and a lot of what you say is true. These guys work tough hours though, it's a grind. The mode I have right now is like 70mb, takes 30 seconds to iterate to a stable value, and is so janky haha
PM me if you want to chat about it I'm at a euro bank in NYC
The problem I find about infra models (particularly renewables) is that you NEED to know MACROS/VBA code to function effectively
I didn't need macros during my 3 years in IB and in PE. Granted I didn't do PU IB (I was a fig and TMT analyst)
DOnt go by my title
Pension / SWF is the way to go. Still direct PE, growing platform/capital to deploy and better hours with still solid comp
how hard is it to land one of these seats?
I wouldn’t say it’s any more difficult than any other reputable PE fund, the issue is there’s just a pretty limited number of seats that fit the bill
Out of curiosity, how does the economics in infrastructure PE justify the intensity / worse hours?
Relative to traditional PE, it seems like infrastructure generally has much lower returns, as well as a lower fee structure (mgmt / carry), so would that suggest lower comp?
Yes, I've been told it's different at the MFs where folks are paid the same across all PE strategies, but generally Infra PE seems to pay quite a bit less due to fee structure and typical returns. How it makes up - it kinda doesn't, except maybe at some LMM/MM infra funds like mine with decent (for PE) WLB. There's some potential upside for lower industry cyclicality and job security maybe, but in general I would say not to do infra unless you really want to be in this sector - purely from the financial point of view it's not worth it.
Another unspoken fact is that many in infra PE could never have gotten into regular corporate PE - think ex-engineers with no IB/consulting experience, project finance bankers, Big 4 guys from infra advisory, non-targets, etc. It's very true in my experience that infra PE is far more open to non-traditional candidates, but that's in part because on the whole it kinda has to be.
Agree to the extent that Infra is more open to diverse backgrounds, partly because it has to be. But also because different skillsets matter more and are complementary. I think you will find at the larger funds, backgrounds are basically the same as corporate PE - think banking programs, MBB etc. The fund I work at has a dedicated ops team that is staffed with engineers - the IP's all have typical backgrounds, with most coming from competitive groups.
I'm honestly puzzled by the WLB comments here. All of my friends in corporate PE seats at half decent funds get absolutely killed, and my WLB is significantly better than theirs, honestly. Until the senior levels, there seems to be very little differentiation in comp - obviously infra has lower returns ultimately, but given the contractual nature of your cash flows, your downside is much more limited. Do you know how often funds actually make hurdle, across strategies? Spoiler alert - it's rarer than you think. We are also in the midst of an era-defining investment theme in infra and transition, so I honestly do not think there is a better sector to be in (aside maybe from tech which is always hot, but way too spivvy for me).
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