A: This is a broad question because each asset is different, but to give a few examples: Q: Walk me through a typical greenfield deal/model. Sorry, you need to login or sign up in order to vote. It started in Australia in the 1990s, spread to Canada and Europe in the early 2000s, and eventually made its way to the U.S. as well. For reference: https://www.ucl.ac.uk/prospective-students/graduate/taught-degrees/infrastructure-investment-finance-msc. Many of these assets are extremely stable and last for decades. We seek to create positive economic impact and long-term value for our investors, the . Questions were a mix of technical and fit. Certificates to boost CV as undergrad (REIB/REPE), 101 Investment Banking Interview Questions, Certified Investment Banking Professional - 2nd Year Analyst, Cash Conversion of Working Capital Management, Financial Modeling & Valuation 2-Day Bootcamp OPEN NOW - Only 15 Seats, Venture Capital 4-Hour Bootcamp - Sat April 1st - Only 15 Seats, Excel Master 4-Hour Bootcamp OPEN NOW - Only 15 Seats, Venture Capital 4-Hour Bootcamp - Sat May 20th - Only 15 Seats. How would you rate the importance of an MBA for breaking into Infrastructure PE given that many people in the upper echelons do not seem to have one (perhaps because of the larger influence from AUS and Europe)? Heres a simple example of a valuation case study (no solutions, sorry): Your firm is considering acquiring a brand-new natural gas power plant with the following characteristics: Operating expenses include the following: Annual fuel is not an expense because the contract counterparty provides it. Qui sunt incidunt laborum quas. Importantly, depreciation must be excluded, except for its tax impact, because its non-cash. WSO depends on everyone being able to pitch in when they know something. A: You almost always use a DCF model for these assets because cash flows are fairly predictable. Alinda Infrastructure Fund II LP The upside is that the lifestyle is also much better: you might work only ~40-50 hours per week at some of these funds. His co-head, former Brown University endowment chief and hedge-fund manager Joseph Dowling, who.css-1h1us5y-StyledLink{color:var(--interactive-text-color);-webkit-text-decoration:underline;text-decoration:underline;}.css-1h1us5y-StyledLink:hover{-webkit-text-decoration:none;text-decoration:none;} joined the firm in January, will become sole head of Blackstone Alternative Asset Management, the worlds largest funds-of-hedge-funds business. Deal sourcing consists of inbound flow from bankers, competitive auctions, secondary deals from other financial sponsors, and sometimes buying entire infrastructure companies or individual assets. These funds have advantages over traditional PE firms because their returns expectations are lower, and theyre non-taxable in Canada, so they can afford to out-bid other parties and pay high prices for Canadian assets. Blackstone veteran John McCormick told the firm last week he had decided to resign, the firm told The Wall Street Journal. also do domestic infrastructure deals. Not important. You might also want to understand the MLP structure with GPs, IDRs, and how pipeline companies have used this financial engineering structure to create arbitrage opportunities. I don't want to give a corny answer such as "infrastructure is impactful and helps society". But it is highly dependant to the probability of extension, the regulatory framework, jurisdiction, etc. Odit id dolor est dolorem ut. Blackstone Infrastructure Associates (Lux) S. r.l. Is this considered PE? There are different lease types (ground leases and rooftop leases), and location is even more critical than with other infrastructure, so these assets are closer to real estate in some ways. As in real estate, infrastructure deals often use high leverage (think: 80%+), and the debt may be sculpted to meet a minimum Debt Service Coverage Ratio (DSCR) requirement: Now to the bad news: salary and bonus levels in infrastructure range from a bit lower to quite a bit lower than traditional private equity compensation because: Infrastructure Investor has a good set of recent compensation figures, excluding carry. 01. Illum quod tempora repellat dolorem. London team is growing (they poached two MDs recently). And with the dismal state of infrastructure in most countries, its safe to say that there will always be demand for investment even if it takes a few broken bridges and toll roads to get there. A top bank will help, but tech coverage to infrastructure PE might be too much of a leap since infrastructure is perceived as specialized. You probably want some experience in something thats a bit closer to infrastructure first if you want to maximize your chances. QTS Can a banks prestige override that? Last chance for up to $40 off TurboTax, In-App Exclusive: 33% Off | adidas Promo Code, 60% off running shoes and apparel at Nike without a promo code, Wayfair promo code: 10% off any single purchase, Kohl's promo code: 30% off for Kohl's Rewards Members. or Want to Sign up with your social account? Some of the most important ratios include the Debt Service Coverage Ratio (DSCR) and the Loan Life Coverage Ratio (LLCR), along with standard ones like the Leverage and Coverage Ratios used in debt vs. equity analysis. Blackstone Infrastructure Associates (Cayman) NQ L.P. Cayman Islands. Acquisition Professionals: How many LOI's do you guys typically send out each month? Sectors within infrastructure include utilities (gas, electric, and water distribution), transportation (airports, roads, bridges, rail, etc. Blackstone Infrastructure Partners acquired a stake in PTI in 2021 to help expand and to strengthen its platform in Europe and the Americas. The LLCR is defined as the Present Value of the total Cash Flow Available for Debt Service over the loans life divided by the current Debt balance. All Rights Reserved. Im a civil engineer by training, with a few years of Big 4 infra advisory experience (Canada and UK). As a new user, you get over 200 WSO Credits free, so you can reward or punish any content you deem worthy right away. So, we dont officially teach infrastructure modeling currently, which means I cant answer your question definitively, but in the models Ive gathered, Ive seen both approaches (factor in these tax elements or ignore them). And the case studies and modeling tests are much simpler than on-the-job models because you usually have only 1-3 hours to complete them. There are also infrastructure investment banking groups, which advise sponsors and asset owners on deals rather than investing in debt or equity directly. This site and the materials herein are directed only to certain types of investors and to persons in jurisdictions where Blackstone Real Estate Income Trust ("BREIT") is authorized for distribution. Your information will not be shared. Thoughts on ops role at PE firms like blackstone and kkr? I was wondering how difficult you think it would be to break into infra PE as an analyst from a tech IB group. Thats because local governments set the allowed rates, and demand doesnt fluctuate much unless the local population grows or shrinks significantly. Some PE firms focus on infrastructure; examples include Global Infrastructure Partners, IFM Investors, Stonepeak Infrastructure Partners, I Squared Capital, ArcLight Capital, Dalmore Capital, and Energy Capital Partners. You cant just say, Assume revenue growth of 5% it has to be backed by contract-level data and extensive industry research. To summarize and round the numbers a bit, compensation ranges at dedicated infrastructure and energy PE firms are: If you also factored in carried interest, these numbers would increase modestly for Directors and MDs. - Lots of interview rounds. Then, you forecast the revenue, expenses, and cash flow in different scenarios and size the debt such that it complies with requirements, such as a minimum Debt Service Coverage Ratio (DSCR). The most common entry points into infrastructure PE are also the most common exit opportunities: investment banking, project finance, real estate, other areas of PE, infrastructure corporates/developers, and Big 4 infrastructure groups. See you on the other side! When evaluating deals, assessing the downside risk is critical because the upside is quite limited. Ipsa quia ut optio laboriosam consequatur et eos voluptas. The fund is located in New York, New York and invests in the United States. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value). News Corp is a global, diversified media and information services company focused on creating and distributing authoritative and engaging content and other products and services. real GDP growth + inflation). Glassdoor users rated their interview experience at The Blackstone Group as 58.0% positive with a difficulty rating score of 3.07 out of 5 (where 5 is the highest level of difficulty). RAB based returns). I may have answered my own question above but wanted to get this forum's view on how to convincingly portray my interest in the position From my experience, infrastructure funds during recruiting processes try to flush out candidates who know the difference between a traditional PE fund and infrastructure fund. Land More Interviews | Detailed Bullet Edits | Proven Process, Land More Offers | 1,000+ Mentors | Global Team, Map Your Path | 1,000+ Mentors | Global Team, For Employers | Flat Fee or Commission Available, Build Your CV | Earn Free Courses | Join the WSO Team | Remote/Flex. Theres a blurry line between energy private equity and infrastructure private equity in the U.S., which is why firms like ArcLight and Energy Capital could be in either category. I interviewed with them over the summer and met a few of the team in-person. Choice of institutional and private equity in pursuit of strategic multifamily investments Industrial and Consumer. Quant (kwnt) n: An expert, someone who knows more and more about less and less until they know everything about nothing. Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling. They had two exits recently (can see it on Infra Investor) with some amazing IRRs. Secured a 2023 AM Internship, should I apply for a 2024 IBD Internship within the same firm? Do you believe debt breeds managerial excellence? Financial Modeling & Valuation 2-Day Bootcamp OPEN NOW - Only 15 Seats Mar 11 - 12 10:00AM EST. Blackstone 0 152 195 201 221 3 0 103 120 184 0 92 99 206 202 102 0 70 Highly Confidential & Trade Secret Fund Overview Blackstone is committed to being one of the world's largest infrastructure Blackstone Group LP is exploring a new infrastructure-investing business at a time when more money than ever is being committed to funds that aim to invest in ports, pipelines and other public works. Final Early Bird Pricing! A: Regulated utilities for water and electricity have lower risk, lower potential returns, and a higher percentage of total returns coming from the cash yields. Any advice for prep for Private Wealth Solutions at Blackstone? Sign In. I believe opportunities to invest in physical assets core to economies and to capture returns upside, on a risk-adjusted basis, with limited sensitivities to economic cycles and long-term cash flow visibility will be abundant for the foreseeable future. With telecom assets like cell phone towers, the risk and potential returns are even higher, with much of the returns expected to come from capital appreciation. WSO depends on everyone being able to pitch in when they know something. Would caveat that because of the higher prevalence of auctions due to pricings getting competitive the work-life balance I see is getting worse even on the pension fund end of the scale and so comp is adjusted accordingly. I interviewed at The Blackstone Group (Singapore) in Feb 2023. In the U.S., Colony Capital and AMP Capital are examples (they do both real estate and infrastructure). I used this to initially break into project finance and now work at an infra-PE fund. Its hard to compare to direct lending because it depends on what youre looking for. Comparable projects cost $1,000/kW currently and are expected to increase in price at 2% per year, with a useful life of 40 years. Description. julie dawson daughter of les dawson. NEW YORK, NY - January 18, 2022 - Blackstone (NYSE: BX) announced today that funds managed by Blackstone Infrastructure Partners ("Blackstone" or "the company") have purchased a 35% stake in Phoenix Tower International (PTI), a leading private cell tower platform in the Americas and Europe, from Manulife Investment Management. Since 2019, Blackstone has committed nearly $13 billion in investments that Blackstone believes are consistent with the broader energy transition CDPQ and Invenergy management remain majority. You will be notified in advance of any changes in rate or terms. You get busier when deals are heating up, but its still a vast improvement over the typical IB/PE hours. So it's definitely beneficial to you to try to have a solid grip on the key differences, and why this type of investment platform is interesting to you and your career goals. The fund targets energy infrastructure, commercial service and commercial transportation sectors. Stonepeak Infrastructure Fund III is charging a 1.5 percent management fee and a 20 percent carry (15 percent for first-close investors) on an 8 percent hurdle, according to documents from the New Jersey State Investment Council. We guarantee 100% privacy. A single infrastructure PE firm could have different types of funds, each one specializing in one of these categories, but in practice, the first three strategies are the most popular ones. Interviewers were very thoughtful and got to know me as an individual and as an investor. I think you would need another degree or an actual finance/advisory role to get in. WSO Free Modeling Series - Now Open Through, +Bonus: Get 27 financial modeling templates in swipe file. both in person and virtual. New York, NY, July 18, 2019 - Blackstone (NYSE: BX) today announced that it has held the final close of its inaugural fundraising phase for Blackstone Infrastructure Partners (BIP). All Rights Reserved. There are plenty of miscellaneous firms that do infrastructure investing as well. So, all else being equal, theyd prefer someone who knows infrastructure very well to someone with IB experience but in an unrelated group with no exposure to asset-level modeling. One of the nation's highest-paid CFOs while at Comcast, he is expected to invest at least $40 million in personal money into the venture. Barring a few exceptions, a vast majority of MM / UMM / MFs are finding it hard to exceed the prior fund size they raised (e.g., Caryle, Blackstone, Apollo - all publicly hinted at). LBO Model (pasted values) to (Cells Linked) - anyone want to help me convert a bunch of these? If youre already familiar with Excel, LBO modeling, and/or real estate financial modeling, these tests should not be that difficult. In the UK I believe you usually have assessment centers or something? 2023 PitchBook. Hi Brian. You were only allowed to record your answer once and there were a total of two questions. Quis qui minima neque atque rerum voluptates ut. Q: How would you value a toll road or an airport? Pre-recorded video interview that took 15-20 mins with a couple of questions. The approach you suggested sounds reasonable, but many infra assets do assume a Terminal Value if the asset is expected to last for decades. Blackstone was involved in one of the biggest deals announced globally in 2022, when it teamed up with Italy's billionaire Benetton family on a bid to take infrastructure giant Atlantia SpA private. WSO depends on everyone being able to pitch in when they know something. 2005-2023 Wall Street Oasis. Preqin issues good infrastructure reports once per year, which you can Google, and this guide from JP Morgan also has a concise sector overview. Here's an example of why, at least I think, is a good indication of interest in the space: non verbal communication differences between cultures ppt. (if applicable) for The Wall Street Journal. Real-life infrastructure models can be complex, but time-pressured case studies are a different story. Well-known names include Swiss Life, Allianz Capital Partners in Germany, and Samsung Life Insurance in South Korea. top feeder schools to wall streetirina emelyanova pasternak 26th February 2023 / in coastal carolina football camp 2022 / by / in coastal carolina football camp 2022 / by No carry for another 4 years. bump - any other responses would be appreciated as well. Thank you for taking the time and effort to write such high quality guides, this infra one and the many others! Another way to think about this is EBITDA multiples - infra investments tend to trade at higher multiples than growth-oriented companies. You could avoid that if you relever every year. You have a few infra threads around on WSO - please search for those. 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