Infrastructure PE - Model Test
WSO Team - I am looking to move from a banking role into an infrastructure private equity fund. I have had a few interviews already - nothing too technical - but am being asked to come in and take a modeling test. Does anyone have advice or tips/tricks for an infrastructure related modeling test? Unsure if it would be typical LBO modeling or if it would be more similar to three statements and contract/cash flow modeling. Would appreciate any advice from the more experienced folks out there who have gone through this process before.
Lookup Corality and understand Project Fianance. This will likely be a case study similar to one of a Renewable Energy Project, Toll Road, Airport etc...
This is based on debt sculpting, understanding DSCRs, and NPV/IRR. There's a chance you have a three statement model, though often rare. This will be a cash based model which you'll have to grear to a certain debt ratio and targeted IRR (Given a D/E target and Target IRR to solve for how much equity you should put in.
Wow I really wish I saw this before flunking an Infra modeling test-- this was spot on...
Can I PM you
Is corality suitable for someone from civil engineering background to show they have an interest to entering finance?
Curious to also understanding this better, since I have a similar opportunity.
Will likely be a fixed term LBO discounted at a target IRR. Sensitivities likely to include gearing at different levels, testing re-contracting versus merchant, sensitivity to macro factors like inflation. I've seen a few models test if you understand covenants given the leverage used in infra. This is typically calculating a LTM / NTM DSCR and creating a test for lock-up or default. The model shouldn't be too complex I've found most cases are roughly 2.5-3hours. A fully functional and reasonably formatted model should be easily completed in that time.
I have never seen a three statement model across the case studies I did recruiting for infra PE. I would also be privy that time will be a constraint here. Most of the interviews I did I also had to put together 5 or so pages or a word doc portion summarizing risks, mitigants, investment recommendations, financial results summaries etc. Similar to what you'd see in an actual committee paper. Your mileage may vary however.
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