Why did you get into infrastructure PE?
What do you like / dislike about the job?
How did it compare to your expectations?
If you could go back in time, would you still do infra PE?
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Bumping this as someone on the sell-side in PUI thinking about making the jump. It seems to me from a lifestyle/hours perspective, most Infra PE shops don’t really offer much of an improvement to IB. A lot of places actually sound worse. I would be grateful to hear anyone’s thoughts.
Simple. I fell into it.
I can chime in here. I was on the sell-side covering P&U and infrastructure so naturally it made sense for me to transition to the buyside in a similar role. I think this is the case for most people who land in infrastructure investing roles.
I personally think infrastructure is really interesting and has become so broadly defined that you can really get your hands on anything, subject to working at a fund with a very specific industry mandate. I've always been of the view that broader is better, particularly at the junior level where you don't know what you don't know. I think infrastructure presents you with the opportunity to work on a wide range of asset classes while developing strong technical skills as well. Through my experience I've been able to figure out what corners of the market are aligned with my interests, and what corners bore me to death. Like many users have mentioned, infrastructure tends to be quite a slog for juniors because a lot of the analysis and diligence is very granular by virtue of how infrastructure is priced. This is good and bad - on one hand you are forced to develop an extreme eye for detail and financial modelling skills that are arguably far superior than folks who invest in more traditional businesses, but on the other hand the hours can be pretty rough.
In terms of expectations, I knew what I was getting into so there were no real surprises and looking back I would have gone down the same path. I think the appetite for infrastructure investing remains strong and will remain resilient over the next 15-20 years, particularly investments into renewables and business that support carbon reduction - good from a career risk perspective. I will say that in light of covid and degrading WLB over the past year and a half, I am giving thought as to how I might transition into an equally as interesting role that is less demanding (i.e. co-invest, SWFs, pension funds, etc.). Hope this helps.
Thanks for the detailed response.
Would you advise a junior to join a green energy (wind/solar/batteries) focused PE? It's very specialized and I'm concerned that it will pigeonhole me in this industry.
Also, any insights into what exit ops are from here? E.g. would a transition into mid market corporate PE / green energy focused VC be a possibility?
I'm not the above user but have been in infra investing for the past 3 years. I'd say that this would be pretty close to a pigeon-holing move because the skillset is different.
With power investing at the asset-level, DD focus and modeling are pretty modular - you look at pricing forecasts (try to get comfortable with the curves), look at production levels and then financing (not gonna spend a ton of time on opex considering the high margins on these things). With platforms, it gets more interesting cause of the corporate and human elements involved (e.g. LTIPs, capital allocation, business strategy, etc.) but tbh there are only so many platforms you'll get to do deep dives on (esp. if your coverage is limited to North America - if your fund has a global mandate, then you have some busy years ahead of you).
Ideally, you'd try to place yourself for a spot at a generalist infra fund i.e. they look at power, transport, telecom and other core-plus businesses (e.g. container leasing, aviation, etc.). Here you'll get to see more businesses than assets and that'll help make up for the deficit in the power-only experience - deficit in the sense of skillsets required to jump to corp mid-market PE.
That being said, transitioning from green energy PE to green energy VC seems like a very natural step to me; I've seen more than a handful of people make that jump.
Curious buyout associate here, but have you seen many lateral moves from corporate private equity to infrastructure? Starting to develop a lot of interest in the asset class and wondering what a logical path could / using an MBA.
bump
According to Brandon infrastructure covers everything under the sun, including payouts to Haiti
Just my 2 cents - I'm not in infra PE but am in a place where there's a team that does that, and used to be forced to do infra pitches / half baked deals all the time.
1. If you're talking about brownfield assets and at least not assets in development stage (ie. feasibility study, bidding, getting permits etc), there are probably only a few investors that you want to join. IMO pension funds / SWF types are a good one.
2. Although infra seems to have really exploded over the past few years, I would think that there is still naturally less competition for deals / it's usually the same names in a region competing for deals. My impression from this is that less time is wasted on stupid internal memos and other posturing / positioning. If you're only going to have so many truly keen investors in a region then as a vendor you'll probably avoid playing them to the point of pissing them off.
The downside (again, just my relatively uneducated 2 cents):
1. I don't think it's that easy to transition outside of infra. The execution skills required are likely quite different
2. Sure, there are lots of infra asset types, but ultimately the way you look at them is the same and it frankly seems quite repeatable. Sometimes being forced into being a generalist early in your career teaches you to be flexible and you pick up small bits on each industry.
3. There's a lot of focus on technical modelling but tbh other than being really good at debt sculpting and sizing, I don't really see how that's a transferrable skillset once you're no longer a junior. Investing isn't modelling. Maybe if you learn how to do alot of complex structuring from this, there's value.
The only bit that really interested me about infra was how some hustler (developer) could make a billion dollars out of almost nothing just by hustling and wining and dining the officials of certain types of countries into giving him govt-backed PPAs. He even got a personal bank loan for the equity portion of the development cost that he was supposed to fund.
I god damn love toll roads and bridges
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