UK
Getting into infrastructure
13 May 2008
While all other bubbles have burst, investors are still hurling money at infrastructure. Rumour has it there are even jobs to be had in the sector. Predictably, however, you’ll need infrastructure experience to be in with a chance of landing one.
Recruiters in the sector say there are more than 50 infrastructure-related vacancies in London now.
“Infrastructure hiring isn’t as unsustainable as leveraged finance hiring was during the boom – when there were 200-400 vacancies in London at one stage,” says James Wakefield, head of the infrastructure finance team at Cobalt Recruitment. “But there’s definitely a lot going on.”
Wakefield says the big infrastructure recruiters currently are the infrastructure funds, rather than investment banks’ infrastructure advisory or financing teams.
Emboldened by the success of the Macquarie model, other banks want a piece of the pie. It emerged yesterday that Morgan Stanley raised $4.0bn for an infrastructure fund operating out of New York, London, Hong Kong and Beijing, while a joint venture between Credit Suisse and General Electric raised $5.6bn.
A director at one UK infrastructure fund says the sector is home to people with all manner of backgrounds: “People come from project finance, and sometimes from leveraged finance. Infrastructure deals tend to be quite structured, so you also get people with legal and tax experience.”
On the whole, however, previous infrastructure experience is strongly preferred. “At a junior level, a form of ‘hybrid’ financial modelling skillset is imperative,” says Catherine Armstrong at search firm Kinsey Allen. “Infrastructure candidates need to fall somewhere between the big-picture modelling that goes with leveraged finance and the minutiae of modelling a project finance transaction.”
“At a more senior level, prior knowledge of equity investing in infrastructure is usually mandatory,” she adds.
Pay varies hugely, but Wakefield says an infrastructure professional with five years’ experience can probably expect a base salary of £60k-£90k, plus a bonus of 100%, plus – if working in private equity – carried interest.
As someone who has worked in both the infrastructure debt and equity fields, I can confirm the market remains buoyant, with opportunities skewed towards equity. In general, unless you are one of: i) an existing PE or infra fund pro; ii) at a top-tier invstment bank in an infra M+A capacity and have experience of winning deals; or iii) a broad structured debt (infra hybrids plus LBO plus securitisation) grounding with a long deal list, there is little chance of getting through the door for an interview. Even in the case of category ii) several of the banks that lead the M&A league tables have not completed any real, big ticket transactions (certain active infra funds prefer to self-advise and keep the fees internal, given the different structure of infra funds vs. straight LBO PE counterparts, hence fewer standard M+A mandates in the market). Other investment banking, project finance or, especially, accounting personnel simply won't be of interest.
Phil- outside of accountants/DD firms that would work on Scottish transactions, I don't think much is happening in Edinburgh. Franfurt is quite hot though, but the ability to speak German is usually required.
Martin 16 May 2008
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