Infrastructure Private Equity - Interview help

bump

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?

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

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.

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.

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.

Search “infrastructure pe” on this app/website. You should see a thread called “overview of infrastructure pe” that will be helpful.

Curious about how to think about "value" in infra given the surge in megafunds fundraising and asset valuations over the past few years. Im speaking with a core+ middle market fund focused on utilities, telecom, power and transport and looking to better understand where industry folks see "value" in the market by asset class or region? Would love to hear thoughts over PM.