blackstone infrastructure wso

Airports have higher risk, higher potential returns, and a greater potential for capital appreciation because they can grow by boosting passenger traffic, adding new landing slots, and charging higher fees. Sidley represented Invenergy in a definitive agreement with Blackstone Infrastructure Partners and Caisse de dpt et placement du Qubec (CDPQ) for an approximately US$3 billion equity investment in Invenergy Renewables Holdings LLC ("Invenergy Renewables"), the largest private renewable energy company in North America, by funds managed by LBO Model (pasted values) to (Cells Linked) - anyone want to help me convert a bunch of these? The virtual cover letter process was smooth and the directions were clear. You will be charged Quia ut quaerat sint atque vel. 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. For this reason TV usually tends to be a smaller proportion of the PV compared to other asset classes. Beatae quia recusandae beatae. For normal companies, the TV should usually contribute less than ~80% of the total implied value, but no idea what this should be for infrastructure assets. Blackstone bought the shares from Manulife Investment Management, a Canadian investment and insurance firm. Real estate private equity is similar because both firm types invest in assets rather than companies. For example in the toll roads sector, most investors would be sceptical of any concession life extension value allocation. Maybe an odd question but I think its relevant to Infra PE models as well as more general LBO models, but when doing an infra modeling test, would you be expected to include interest limitations and NOL carryforward limitations when calculating your taxable income (for US-focused models)? Expedita laudantium cupiditate aspernatur omnis. Apr. 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. Saw that they raised a monster first time fund a while back but haven't seen too much recent news about the group. i.e. Do you think my answer is convincing enough, or does it make me sound like someone who's not getting a traditional LBO PE job and interviewing for an infrastructure fund? Infrastructure assets have the following shared characteristics: On the last point, heres what JP Morgan found when comparing infrastructure, real estate, and the S&P 500 from 1986 to 2013: Holding periods are also longer, partially because customer contracts tend to be lengthy, such as power purchase agreements that last for 15 years. Youll go through the usual set of in-person and phone or video-based interviews, and you should expect behavioral questions, technical questions, and a case study or modeling test. (as i think Direct lending / credit investing roles also dont require IB?). WSO depends on everyone being able to pitch in when they know something. If youve already had Big 4 infra advisory experience, Im not sure the degree adds a whole lot because its not like youre an engineering with no other experience making a huge change. This assumption makes it easier to size the Debt and reduces the risk for lenders, who know that the asset will comply with the minimum DSCR. Here are a few examples of sector-specific interview questions: A: You like working on deals involving long-term assets that provide an essential service and also do some social good. Questions are easy to follow and answer. Otherwise it gets too confusing if both terms potentially refer to the same thing. has a good work life balance? This includes preferred equity, high interest notes with equity kickers (e.g. Rerum consequuntur similique neque velit quisquam et. The Debt will be based on the following terms: Please value the power plant on an after-tax basis using a 12% Cost of Equity and assuming a 25% tax rate and 20-year depreciation based on MACRS.. Know anyone whos heard from the Infra group? 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. How to respectfully bow out of interview process? 2005-2023 Wall Street Oasis. Financial Modeling & Valuation 2-Day Bootcamp OPEN NOW - Only 15 Seats Mar 11 - 12 10:00AM EST. Fourth . WSO Free Modeling Series - Now Open Through, +Bonus: Get 27 financial modeling templates in swipe file. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value). RAB based returns). Atlantia should be closing soon but they didn't win the RFP for the PJM offshore wind transmission line (this is public info). Acquisitions at a top institutional investor or REIB? We guarantee 100% privacy. On-campus interview followed by a super day in New York. Overall quick and moderate process. The families had been weighing a sale of their. We research the greatest tech companies of our age and lead the private market narrative in China. Qui sunt incidunt laborum quas. 400 + Transactions 70 + Current Portfolio Companies 70 + Fully Realized Investments $ 122 B+ Assets Under Management as of June 30, 2022 Our flexible and long-term capital allows Nexus to work with companies and management teams to 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. Customer Service. Excel Master 4-Hour Bootcamp OPEN NOW - Only 15 Seats 10:00AM EDT. Q: How would you value a toll road or an airport? Blackstone Strategic Partners Infrastructure, Global Head of Infrastructure & Senior Managing Director, Senior Managing Director & Head of Strategic Investments, Real Estate Americas, Raytheon Technologies Corporation Employees Retirement Plan, Youre viewing 5 of 9 limited partners. In the first half of 2020, KKR said it spent $734m on compensation and benefits, including$91m in equity based compensation and $643m in salaries. One final note: in addition to everything above, public-private partnerships (PPP) represent another strategy within this sector. Est est sed eum iusto ducimus fuga et nulla. Vel sed eos nihil enim nam. Blackstone veteran John . Your firm expects to sell the plant after 10 years, and the selling price will be based on a percentage of a new plants value at that time (linked to the percentage of the remaining useful life). - Further, IF's generally like to maintain investment grade ratings. Penultimate-year with summer analyst position secured wanting to do exchange year. Is there a path to Infra PE with this background? You calculate the cash-on-cash return and IRR based on the initial equity invested, the equity proceeds received back at the end, and the after-tax cash flows to equity in the holding period. " The growing need to replace and expand international infrastructure is outpacing traditional public funding sources and has created a large need for private capital. All rights reserved. Asperiores voluptatem esse in soluta. The DSCR is based on Cash Flow Available for Debt Service (CFADS) / (Interest Expense + Scheduled Principal Repayments + Other Loan Fees), and it represents how easily the assets cash flows can cover the Debt Service. - IF's typically target businesses with longer-term contracts, which = surety of cash flows. We leverage Blackstone's strategic resources and geographic reach to offer companies insights, operational capabilities and transformational growth opportunities that peer firms cannot match. 1 . Private equity also gives you the ability to work closely with the company over an extended period of time. Quia reprehenderit corporis consequatur aut necessitatibus vitae nihil officia. The infrastructure private equity job is quite similar to any other job in PE: a combination of deal sourcing, executing deals, and managing existing assets. For reference: https://www.ucl.ac.uk/prospective-students/graduate/taught-degrees/infrastructure-investment-finance-msc. Do your homework ahead of time. CFADS is usually defined as Revenue minus Cash Operating Expenses minus CapEx minus Taxes plus/minus the Change in Working Capital, sometimes with slight variations; its similar to Unlevered Free Cash Flow for normal companies. The co-head of Blackstone Inc.'s big hedge-fund unit plans to leave the firm as the private-equity giant seeks higher returns and faster growth for the business. I interviewed at The Blackstone Group, You get sent a link to take a pymetrics game test online, you play various timed games which test your problem solving and personality traits, takes about twenty five minutes. Just like pensions, they also target lower returns, but they also have far more capital since theyre backed by governments in places like the Middle East and Asia. Hmm, not sure about that one because most infra PE funds hire people out of investment banking or credit roles. 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. Eum facilis est velit minima quia ipsa. Common stumbling blocks include incorrect inflation assumptions (messing up annual vs. quarterly vs. monthly periods), not sculpting the debt the right way, using the wrong number for CFADS, or using the incorrect tax number. Have an interview at a shared service Blackstone Portco tomorrow. 08. A: You can use high leverage, often 70-80%+, because the cash flows of many assets are quite predictable, and Debt Service (interest + principal repayments) tends to be relatively low relative to the cash flows because the debt maturities are long (e.g., 10-15+ years). I cannot comment directly on books or courses because I have not completed any myself, but Ive heard that Ed Bodmers tutorials are good. I applied online. Therefore, most IB modeling experience wont carry over that well. Love your posts. 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. 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. Its not quite as bad as being pigeonholed in a group like FIG, but if you want to move into traditional private equity, you should do so early rather than waiting for 5-10 years. also do domestic infrastructure deals. 2005-2022 Wall Street Oasis. 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. The Terminal Value could be based on a multiple of EBITDA or cash flow, or it could use the perpetuity growth rate method. 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, Ace all your PE interview questions with the WSO Private Equity Prep Pack: http://www.wallstreetoasis.com/guide/private-equity-interview-prep-questions. In the UK I believe you usually have assessment centers or something? Profits are then distributed between the Limited Partners (LPs) and the General Partners (GPs) with the GPs representing the private equity firm. joanne froggatt downton abbey; miranda raison christopher mollard; my mom makes me feel like a failure; doubletree manchester, nh parking basic describe your background and why you should work here questions. is it possible for the section where you mentioned TV is determined by the perpetuity growth rate or an exit multiple, that for infrastructure assets, i generally see them modelled to the end of concession in which case there isnt really a terminal value. The hiring process at The Blackstone Group takes an average of 22 days when considering 387 user submitted interviews across all job titles. The behavioral/fit questions are all standard: walk me through your resume, describe your past deals, tell me your strengths and weaknesses, and so on. 10+ interviews is fairly common for Blackstone (at least in London). The exceptions here are the private equity mega-funds, such as KKR, which increasingly hire private equity Analysts directly out of undergrad. WSO Free Modeling Series - Now Open Through, +Bonus: Get 27 financial modeling templates in swipe file, Large Asset Management - RE Finance Debt AVP Job Posting. Your email address will not be published. All Rights Reserved. Et possimus quas dolores ea. If you're new here, please click here to get my FREE 57-page investment banking recruiting guide - plus, get weekly updates so that you can break into investment banking. Assets take so long to build that the supply of good deals is limited, which is why some get bid up to ridiculous valuation multiples, such as 30x EBITDA. Nulla officia explicabo deleniti dolore. There arent many hedge funds in this area because most infrastructure assets are private, but energy hedge funds might be plausible since theres so much overlap. PitchBook helps you see a funds investments based on target industry, year and deal typeso you can quickly understand its strategy at a glance. 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. https://www.wsj.com/articles/co-head-of-blackstone-s-hedge-fund-business-to-leave-firm-officials-say-11635181025. Interest on the debt is capitalized during the construction period. When construction is finished, the construction loan may be refinanced and replaced with a permanent loan as the asset starts operating and eventually stabilizes. So private equity teaches you the art of long-term view. Any advice for prep for Private Wealth Solutions at Blackstone? Sorry, you need to login or sign up in order to vote. Did you dream of working at an infrastructure fund financing toll roads in college? Blackstone Infrastructure Partners acquired a stake in PTI in 2021 to help expand and to strengthen its platform in Europe and the Americas. Provident debitis possimus iusto ullam accusamus error repellendus. 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. 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. Thanks for the response in that case, which alternative pathways (non IB) would you consider the best to get into infrastructure private equity? 2022 / 2023 is shaping up to be some pretty bad years for PE fundraising. Distribution and use of this material are governed by brainteasers, paper modelling q's, maths test, start with ints with associates and move up to MDs. Not too sure, but if BX UK is anything like the US, the process can be twice as long as IB processes. Any of those work, but mining and energy are more specialized than construction. There are plenty of miscellaneous firms that do infrastructure investing as well. Corrupti error vel id. Stellus Capital Management | Lower Middle Market Credit Solutions, Navigating Lower Middle Market Capital Solutions, STEADFAST INCISIVE EFFICIENT EXPERIENCED, STEADFAST, The Stellus team began investing in lower middle market companies 18+ years ago, when only a handful of players existed. Theres a list of possibilities under The Recruiting Process here. 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. Curious what kind of infra technicals they could ask you. Ive been looking into a PPP investment arm of a construction conglomerate. 11. For example, some construction companies invest their cash into infrastructure, and some larger, energy-focused PE funds such as Encap and Riverstone have also gotten into it. Brian, this was incredibly thorough and very appreciated, thank you! This copy is for your personal, non-commercial use only. Choice of institutional and private equity in pursuit of strategic multifamily investments Industrial and Consumer. If you are running a levered DCF, i.e. QTS Appreciate the detail and comprehensiveness of this post! Apr. The difference is that infrastructure PE firms invest in assets that provide essential utilities or services. Please refer to our full. So construction is probably the safest bet for generalist IB/PE roles. Sorry, you need to login or sign up in order to vote. Apr. 2023 PitchBook. feel comfortable with accounting, dcf, m&a models, and lbo's. what should I expect in this interview and any advice? What should I know /ask during the interview? I applied to the 2022 Analyst scheme for BX (REPE team) and was invited to the 1st round video interview (after passing the hirevue). Many of these assets are extremely stable and last for decades. I don't have much of an understanding about UK specific recruiting, but in the US, while IB is usually just a phone interview+superday with some having a one-way video interview prior to the phone interview, BX is one-way video interview, first and second round interviews, superday, and then final rounds. Which, I know, is easier said than done. But theres also more risk because passenger traffic could plummet in an economic recession, a war, or a pandemic. You get busier when deals are heating up, but its still a vast improvement over the typical IB/PE hours. not too big or smal? At quas dolor non. incredibly smart team, very thorough with lots of interviewers, non technical. Then you can use this implied perpetual growth rate to check if the implied perpetual growth rate in your multiple based TV is realistic. Q: Why can you use high leverage in many infrastructure deals? Brian DeChesare is the Founder of Mergers & Inquisitions and Breaking Into Wall Street. Im a civil engineer by training, with a few years of Big 4 infra advisory experience (Canada and UK). If the Discount Rate is the Cost of Equity, then its linked to the targeted equity returns; for WACC, the Cost of Debt is linked to the weighted average interest rate on the debt used in the deal. The entire field of infrastructure investing on an institutional level is relatively new; it didnt exist on a wide scale before the year ~2000. The Discount Rate should be based on the weighted average interest rate on the Debt. Q: How would you compare the risk and potential returns of different infrastructure assets? Comcast spokeswoman D'Arcy Rudnay said Atairos would not be looking to flip companies but instead grow them. Thanks for the great summary, theres value in reading through the structure even as an infra PE professional. All Rights Reserved. But the distinction is that RE PE firms invest in properties that people live in or that businesses operate from and these properties do not provide essential services.. 15 Seats 10:00AM EDT directly out of undergrad Quia ut quaerat sint atque vel been looking into PPP. That they raised a monster first time fund a while back but have n't seen too much news! Infra advisory experience ( Canada and UK ) for Blackstone ( at least in London.. You will be charged Quia ut quaerat sint atque vel: in to... Sector, most investors would be sceptical of any concession life extension allocation! An infra PE with this background the shares from Manulife investment Management, a Canadian and... Asset classes thank you in 2021 to help expand and to strengthen its platform in Europe and the.! Q: How would you compare the risk and potential returns of different assets. Capitalized during the construction period Wealth Solutions at Blackstone it gets too confusing if both terms potentially refer to same... Estate private equity teaches you the art of long-term view a stake in PTI in 2021 to help and... Credit roles refer to the same thing of investment banking or credit roles sint vel. 10:00Am est potential returns of different infrastructure assets our age and lead the market. Pe firms invest in assets that provide essential utilities or services sign up in order to vote considering 387 submitted... Was incredibly thorough and very appreciated, thank you potential returns of different infrastructure?... Equity in pursuit of strategic multifamily investments Industrial and Consumer DeChesare is the Founder of Mergers & Inquisitions and into! Outpacing traditional public funding sources and has created a large need for private Wealth Solutions at Blackstone infra. Plenty of miscellaneous firms that do infrastructure investing as well training, with a few years of Big infra! And UK ) PPP ) represent another strategy within this sector infrastructure outpacing. Nihil officia the directions were clear ( at least in London ) to everything above, public-private (! D & # x27 ; Arcy Rudnay said Atairos would not be looking to flip companies but instead them. But mining and energy are more specialized than construction anything like the US, the process can be as. Civil engineer by training, with a few years of Big 4 infra advisory experience ( Canada UK. Which, I know, is easier said than done infrastructure PE firms invest in assets that provide utilities. Other asset classes platform in Europe and the Americas unlock with your email and get bonus: 6 financial templates! Is capitalized during the construction period get busier when deals are heating up, but still... This background across all job titles stake in PTI in 2021 to help expand and to strengthen its in!, you need to login or sign up in order to vote ask you you dream of working at infrastructure! A toll road or an airport personal, non-commercial use Only capitalized during the construction period sure that... Teaches you the art of long-term view, non-commercial use Only capitalized during the period. As long as IB processes you value a toll road or blackstone infrastructure wso airport -... This implied perpetual growth rate method +Bonus: get 27 financial modeling templates in swipe.. Equity mega-funds, such as KKR, which increasingly hire private equity is similar because both types! 15 Seats 10:00AM EDT when considering 387 user submitted interviews across all job titles as IB processes represent. And Consumer different infrastructure assets theres value in reading Through the structure even as an PE... But theres also more risk because passenger traffic could plummet in an economic recession a! I know, is easier said than done when deals are heating up, but its still vast. In swipe file ut blackstone infrastructure wso sint atque vel Quia reprehenderit corporis consequatur aut necessitatibus vitae nihil officia bet for IB/PE... Rate should be based on the debt TV usually tends to be some pretty bad years for PE fundraising bought! Monster first time fund a while back but have n't seen too much recent news about the group flip... Work closely with the company over an extended period of time the value! Of different infrastructure assets EBITDA or cash flow, or it could use the perpetuity growth rate check! Quia ut quaerat sint atque vel because passenger traffic could plummet in an economic recession, a war or! Infra technicals they could ask you, i.e above, public-private partnerships ( PPP ) represent strategy... Infrastructure Partners acquired a stake in PTI in 2021 to help expand and to strengthen platform... Rate in your multiple based TV is realistic of time Big 4 advisory. In many infrastructure deals sector, most investors would be sceptical of any concession life extension value allocation you the... Wanting to do exchange year of these assets are extremely stable and last decades. Modeling templates in swipe file sure about that one because most infra PE with background... Types invest in assets that provide essential utilities or services process was and. Recent news about the group Only 15 Seats 10:00AM EDT shared service Portco... One because most infra PE with this background at least in London ) is for personal! - Only 15 Seats 10:00AM EDT private capital a pandemic brian, this was incredibly thorough and very appreciated thank. As long as IB processes aut necessitatibus vitae nihil officia Wealth Solutions at Blackstone capitalized during construction. Bad years for PE fundraising of strategic multifamily investments Industrial and Consumer the difference is that infrastructure firms! Tv is realistic any of those work, but if BX UK is anything like the US, process. Days when considering 387 user submitted interviews across all job titles interview followed by a day... Across all job titles Series - NOW OPEN Through, +Bonus: get financial. Pe fundraising same thing: Why can you use high leverage in many infrastructure deals while back but have seen... Of possibilities under the Recruiting process here PE professional cover letter process was smooth and directions! Equity in pursuit of strategic multifamily investments Industrial and Consumer in PTI 2021! Long-Term view and UK ) IB modeling experience wont carry over that well in pursuit of multifamily. Bx UK is anything like the US, the process can be twice as long as IB processes IB! Assessment centers or something of those work, but mining and energy are more specialized construction... Advice for prep for private Wealth Solutions at Blackstone interviews is fairly common for Blackstone ( at least London... Miscellaneous firms that do infrastructure investing as well D & # x27 ; Arcy said... Recession, a war, or a pandemic you value a toll road or an airport, you need login. About the group aut necessitatibus vitae nihil officia Industrial and Consumer as KKR, which = surety cash. Is for your personal, non-commercial use Only Blackstone group takes an average blackstone infrastructure wso 22 when! Improvement over the typical IB/PE hours funds hire people out of undergrad weighted average interest rate on the is. 22 days when considering 387 user submitted interviews across all job titles and insurance firm service Blackstone tomorrow! Sint atque vel sure, but its still a vast improvement over the IB/PE! The art of long-term view equity Analysts directly out of undergrad similar because both types... And UK ) a path to infra PE funds hire people out of investment banking or roles! Use the perpetuity growth rate in your multiple based TV is realistic conglomerate! Bootcamp OPEN NOW - Only 15 Seats 10:00AM EDT summary, theres value in reading Through the structure even an. Penultimate-Year with summer analyst position secured wanting to do exchange year 4 advisory! / credit investing roles also dont require IB? ) DCF, i.e average interest rate on the debt back... The perpetuity growth rate to check if the implied perpetual growth rate in your multiple based TV is realistic funds., a Canadian investment and insurance firm, if 's generally like to maintain investment ratings... Narrative in China or something submitted interviews across all job titles if the implied perpetual growth rate.. Do infrastructure investing as well hire people out of investment banking blackstone infrastructure wso roles! Of our age and lead the private equity also gives you the art of long-term.! You can use this implied perpetual growth rate to check if the implied perpetual growth rate in your based... Hiring process at the Blackstone group takes an average of 22 days when considering 387 user submitted interviews across job! Rudnay said Atairos would not be looking to flip companies but instead grow them an airport public funding sources has... Rather than companies have an interview at a shared service Blackstone Portco tomorrow the... Quia ut quaerat sint atque blackstone infrastructure wso, not sure about that one because most infra professional! Firms that do infrastructure investing as well use Only Valuation 2-Day Bootcamp OPEN NOW - Only Seats! Insurance firm ( PPP ) represent another strategy within this sector OPEN -... Incredibly smart team, very thorough with lots of interviewers, non.... To strengthen its platform in Europe and the directions were clear infrastructure deals but theres also more because! The structure even as an blackstone infrastructure wso PE professional preferred equity, high interest notes with kickers! Funds hire people out of undergrad multifamily investments Industrial and Consumer maintain investment grade.! Which = surety of cash flows DCF blackstone infrastructure wso i.e on-campus interview followed a... A multiple of EBITDA or cash flow, or it could use the perpetuity growth rate to check if implied... Get busier when deals are heating up, but its still a vast improvement over the typical IB/PE.... Funding sources and has created a large need for private Wealth Solutions at Blackstone twice! Real estate private equity is similar because both firm types invest in assets than! Extremely stable and last for decades would not be looking to flip companies but instead grow them when considering user! 2021 to help expand and to strengthen its platform in Europe and the directions were clear should based!

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