Infrastructure Private Equity - Interview help

Vz's picture
Rank: Baboon | 120

Just wondering if anyone on WSO has had PE interview experience, or working experience with Infrastructure private equity? I did a search and I haven't found too much on the topic, except high level details on one or two top funds.

I'm curious what kind of questions (both qualitative and quant) you got vs. more traditional PE firms?

Do they use similar lbo models? It'd be great if someone has any sample models to share (or can point me to online).

Thanks everyone

Comments (20)

Apr 20, 2011

bump

Apr 20, 2011

Infrastructure (like power/energy) is its own animal. They tend to take people with more project finance / structured energy finance backgrounds. Infrastructure is not about levering to the hilt, primarily because they are more interested in owning assets (versus companies). You're essentially buying a pre-determined cash flow stream to which you may or may not be able to make operational improvements on.

Apr 21, 2011

Thanks HerSerendipity - I actually don't have that kind of background, but I guess they're willing to look at candidates w/o project finance or infra. exp.

So given that it's not really about putting in a lot of leverage and getting out in 5 or more years, what's the modeling like? Probably more emphasis on DCF rather than LBO?

Anyone else with who went through the process or have been in infrastructure that can offer some advice?

Apr 21, 2011

bump? anyone? I tried doing a search on wso, and googled but haven't had much luck...

Apr 22, 2011

It's definitely more emphasis on DCF, finding the right leverage assumptions and residual value of the asset. A lot of analysis around market dynamics come into play. It used to be that traditional infrastructure firms would focus on buying bridges, toll roads, airports, etc. Now, a great deal of them are moving into the power and midstream sectors.

Apr 22, 2011

Think "infrastructure" can be a pretty broad space. I think traditionally it's associated with bridges, toll roads, etc. like HerSerendipity said, but it could capture energy assets (also like she said) or even Telecom or Broadcast assets like spectrum, cell towers, fiberoptic networks, broadcast towers. The amount of leverage you put on the asset will depend on the nature of the cash flows. If you have a portfolio of cell towers that have 10 year contracted and automatically renewing, annually escalated, super steady cash income with very little capex requirements and super stuck customers, you are going to lever the shit out of that.

I would think you could put a decent amount of leverage on a toll road, or a right to operate a city's parking meters, or some other steady cash-flow asset like that, too (although i really have no experience in this space and am not positive that the cash flows are that steady).

In the end, all of these models are going to come down to cash flows and present value. As long as you understand accounting, cash flow modeling (basically accounting in excel), and risk/return, cost of capital, discounting future value/time value of money, etc., you should be able to model any of this stuff. Your DCF can quickly be turned into an LBO model and vice versa, if you have an understanding of the accounting and a conceptual understanding of what the DCF and LBO models are doing and what they're supposed to tell you.

Apr 22, 2011

The firm sounds like CPP IB?
I had interview with Infra PE before; just be ready to talk about DCF since infra funds always have steady cash flow.

Apr 22, 2011

be prepared to answer questions like valuin toll roads, airports, ports...
benchmarking b/w infra funds is also critical wrt industry knowledge

Apr 22, 2011

Okay - can you enlighten me a bit?

Does anyone have any other tips?

Apr 22, 2011

Same as above, It will be pretty similar to IB, but more focused on their key industries & markets
Just don't say windmills, It is Wind Farms, or Wind turbines.

On the Power side know how to value (or make it to EBITDA) on a Gas turbine with a PPA or in Merchant market. Have some understand of how the Power markets work, ERCOT, PJM, etc.

Most renewable come with PPAs, so they are fairly easy to understand, but getting the Gas CC correct can be a little tricky, depending on the market.

Good luck

R.

Apr 22, 2011

find valuation multiples for respective sub industries eg Rev/passenger, Rev/cargos for airports

estimation of IRR a sure shot, bcos most project finance projects are based on this

Apr 22, 2011

Thanks guys - can anyone else offer more direct insight?

Apr 22, 2011

How did the interview go? I'm interviewing for a similar position and am wondering what types of questions to expect

Best Response
May 14, 2017

I worked at Macquarie Infrastructure fund (MIRA) for two years. It is by far the largest and most respected fund in the industry. Inbox me if you need any insight on infrastructure investments, m&a and Asset Management.

    • 3
Dec 28, 2017

hi can you give some insight or model to look upon as i have interview lined up tomorrow for MIRA. And also share some interview questions if you can remember or what to brush up.

Sep 27, 2018

Hi all,

I have an interview coming up for a Junior Marketing and Investor relations role in PE Infrastructure Fund, in a Big Asset manager Group. They told me that will meet several members of their team and prepare a short case study ( ca. 5 hours for the interview).
Could you let me know what to expect at this interview in terms of questions, and what I can be expected for the short case study? and can you provide info on Infrastructure investing, valuation, which financial model to look at, the situation on the market? Thx very much.
Kind regards,
Layah

Sep 27, 2018
Comment
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