Is Project Finance interesting?
Ok folks, let's hear it. People say project finance is for those who can't make it in corporate finance. Do you think there's any truth to this? For those who have tried out project finance do you find it interesting and why?
Bump
I guess this kind of answers the question...
Wow this monologue is pretty fun
Depends more on if you are interested in the topics it entails (e.g. energy and infrastructure projects)
I find it interesting, wouldn’t want to do it 100% of my day but comes with the territory for investing in energy and infrastructure. Not sure who is throwing shade at it relative to standard corporate finance? If doing it as a product group it’s a bit less fee generating than Levfin bc lower risk, but the structuring component is a bit more intellectually stimulating
What kind of project finance are you talking about? Personally, I have no interest in the true infrastructure side (the PPP type deals in transmission/toll roads/ports etc) but love working in E&P (focusing on smaller projects, developers, energy transition).
I work in PF advisory/financial services consulting. Pay is better than CF, at least from what I know/heard.
Work is very interesting --- I might have low standards. We do a lot of models and model auditing for PE clients, and some advisory work (don't work at a bank)
I like both infra and energy sectors --- I get a lot of experience on modeling, especially on the debt side, so you'll have very strong debt modeling skills, suppose you got an offer in PF? I don't see why not.
Nevertheless, a typical PF deal involves multiple parties just like any ther M&A/IB transaction or similar transactions. Depends on which perspective you see.
I disagree. In my firm the top PF guys are though of as some of the brightest. Interest is really fully dependent on the underlying asset and whether or not you’re willing to dive into the technical nature of them. If you can see past the huge, sometimes disorganized, models on a project it’s kind of fun, nerdy but fun. But I would agree with When_the_Pawn above, I work in renewables/energy which is better work.
My god the models.... holy shit some of the nightmares I’ve seen from clients.... nested if formulas 3 lines long and way too many macros...
I work in infra PE, sometimes on PF/greenfield projects. For sure the modelling work in very challenging and formulas are really long but i find the structuring part super interesting.
Moreover, PF / Infra is really long term oriented and very in line with what we need today. I feel lile I'm working in front office finance but still contributing to our society (financing clean energy projects, social housing, etc.) vs. pure LBOs and agressive investing.
Project finance is really interesting, although it's a very broad term and energy is only a small part of PF.
Just signed up for this website after creeping the last x years.
No one gets into PF as a result of being a CF reject. In fact, the skillsets you learn in PF are significantly more applicable than any product or coverage group in IBD (M&A included). Some of the brightest folks and most technically-advanced modelers I have met have been in PF teams. Me personally, I have been an Associate now for three years working in a PF infra team. One thing I can say is the modeling skills you develop are insane. Infra isn't a group where you build a simple LBO, M&A or DCF model in <4 hrs. These models take weeks due to the complexity and constant sensitivities (sometimes 100+) to strain cashflow in the CFW. Current model I am working on has 40 macros so far and thousands of thousands or rows for calcs. Roughly 37 tabs so far.
Most PF bankers are advanced VBA coders as well. I wouldn't consider myself an expert, but over the last three years I have developed significant macro-writing skills that are essential to be successful in PF/infra. (IF YOU WANT TO BREAK INTO PF LEARNING VBA IS KEY FOR CIRCUIT BREAKERS!!!) Pay is equal if not better in some groups (largely dependent on deal flow from what I've seen). We are a very heavy credit-related team as you can imagine. Also, PF is essentially LevFin but on steroids. We structure various tranches of debt with different repayment profiles based on the projected CFADS for the project.
Another thing - I have yet to meet one PF banker who is an absolute dick. They are some of the most nicest people in the industry. If I'm up until 2/3am building models, our MD's are up working with us. It's not the usual BS hierarchy.
Hope this shines some light on PF. A lot of people have this image of Project Finance as a group of joksters with no prestige but I guarantee you... bring any junior PF banker vs anyone else in a product/industry group and the modeling skills and macro ability of the PF guy (or girl) will make the other candidate look like an absolute joke. Also, if you can't tell... very modeling heavy...
A heck of a way to convince someone that PF is interesting by talking up working on copy/paste macros with your MD at 2am...
While there are obvious exceptions, I think it comes down to the nature of the role being more involved than the typical banking roles. I think most people who make a career out of PF do it because of relatively better work-life balance compared to traditional IBD teams as well as the opportunity to get more involved in the underlying energy/infra sector.
Enim corrupti quis provident tempora libero qui aut. Error aut suscipit et.
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