Infrastructure Players
Can anyone shed light on the key infra players/differences among them? I'm aware of the SWFs, more interested in the megafund infra arms and the independent players (Stonepeak, Encap, etc.) Would appreciate any information.
Cheers.
I would generally break the industry into the following (and can be broken down even further between these as well).
Infra PE focused players -- the likes of GIP, EIG, Stonepeak, etc. This is quite broad and can be divided into broader infra and those that focus on energy infra, or pipelines etc. If you want to be in the sector I would recommend these as the best place to be at. Tend to be extremely technical in their analysis, lean teams but a lot of passion for the industry and generally extremely smart people. Each of them has their own intricacies, but lifestyle / hours in line with other PE funds (maybe marginally better).
Infra Teams within MF / Banks -- here is your Carlyle, KKR, Bx, MSIP, GS (I believe they still have) and even SLP and TPG do some work in the space (I believe SLP is shutting its energy / infra related strategy, which fell under Kraftwerk). Worse hours than above. I would generally advise if you are joining a MF try to join for its main strategy and not one of the add-on strategies. They aren't bad places to be, but the focus of the firm is generally around their core strategies.
SWF / Canadians / Pensions - large asset managers that are active in the space. ADIA, QIA, CPPIB along with some of the larger pension funds like Calpers are active here. Brookfield technically falls in the 2nd bucket, but they seem to operate more like these. Generally bid to slightly lower return target. This is a broad category, but the similarity in all of them is that they tend to be quite hierarchical / lot of red tape involved, salaries / bonus lower and generally better hours. In the case of the SWFs the upward mobility is restricted if you aren't a local, so there is a kind of ceiling on how high up you can go. The Canadian shops and pensions are much more lifestyle friendly, good places to be from a long term perspective.
Let me know if you have specific questions on any of these or the sector on the whole, as the topic was pretty broad. If it wasn't clear, for someone looking to move into an Infra investing role, I would recommend these buckets in the order I placed them (i.e. Infra PE fund, Infra team within larger MF / group, SWF / pension fund).
Super informative, SB'd.
Can you go into a little more detail on bucket 1? Do those types of funds specifically look for industry expertise in junior hires or is it the usual mix of guys from P&U groups, M&A, lev fin, etc? And is the career trajectory similar to corp PE (e.g. stay with the fund, switch funds, go the hedge fund route, etc)?
Edit: also, I feel like you hear a ton about stonepeak even though they trail some of the other prominent infra PE players in AUM. Any reason why they apparently garner such respect?
Appreciate it.
Those funds do tend to hire from the groups you mentioned along with energy / natural resources (a lot of them will have a Houston office as well). These are slightly specialized sectors, so having someone with a bit of sector expertise is always helpful, and the models are often quite different, as most of these funds spend more time bidding on individual generation assets and not entire companies. That being said, the expectation in terms of sector knowledge at the pre-MBA / associate level isn't very high at most places.
It is a bit of self selection as well. At the mid / lower ranked P/U and Natural Resources groups, it can be difficult to get looks from traditional PE, so a lot of these guys end up recruiting for infra (in this sense to some extent it is a sector that pigeon holes you). You don't really have a lot of healthcare / TMT bankers who want to move to infra funds, so you don't see many of them in those recruiting processes. If they showed interest in the sector and chose to recruit for these roles, I don't imagine it would be all too difficult for them to break in post IB (or at the very least get interviews).
Couldn't tell you why Stonepeak gets talked about more than others. They do manage a good sized fund and are quite active in the space / quality of people is quite high as well.