Lifting the lid on the big 4 corporate finance teams – infrastructure advisory

Navigating the various teams under the “Corporate Finance” (AKA Deals, Deals Advisory or Transaction Advisory) umbrella within Big 4 Chartered Accounting firms can be challenging.

Knowing what each of these teams can and can’t offer you in terms of your future Corporate Finance career objectives and professional skills development might be the difference between securing your dream job or being overlooked time and time again.

In the second of a series of articles focusing on the various “Corporate Finance” teams within a Chartered Accounting firm, Numbers Executive endeavours to explain the pros and cons of working in the “Infrastructure Advisory” line of service (AKA “Project Finance Advisory” or “Infrastructure & Projects”).

Our insights are based entirely on Numbers Executive’s precedent experiences and we caveat our views represent common outcomes. As with everything, there can be outliers.

The Elevator Pitch:

Broadly, Infrastructure Advisory teams within Big 4 Chartered firms (in Australia) support the public sector (AKA “State” or “Government”) by providing an objective evaluation process for large scale infrastructure investment decisions. More specifically these teams can be involved in:

• assessing the financial and economic viability of a given infrastructure project via the development of a “business case” or “feasibility study” in collaboration with technical advisors (e.g. “is it viable to build a rail line to the airport?”).
• undertaking “options analysis” targeted at solving specific problems (e.g. capacity constraints, value extraction etc).
• evaluating a variety of delivery models / undertaking options assessments for government regarding the various ways a project could be delivered (e.g. delivered as a D&C contract, Public Private Partnership “PPP”, Managing Contractor or , Alliance etc).
• advising government (generally treasury departments or dedicated delivery authorities) with respect to the procurement process for major infrastructure projects (i.e. selecting who will be chosen to deliver a given project). This includes: the development of commercial frameworks, development of procurement documentation (EOIs and RFPs), interacting with bidders, bid evaluation and negotiations).
• Less frequently (and highly dependent on the specific team you are in or Partners you work for), advising the private sector (aka sponsors), via the provision of strategic advice and analysis to support bids to deliver projects (focusing on capital / other structuring .

More than other Corporate Finance teams in Big 4 Chartered, the range of work undertaken by Infrastructure Advisory teams can be highly diverse, hence we caveat that the above represents the mean opposed to any outliers.

What’s great about it:

• Provides opportunities to develop a very diverse skillset (mix of qualitative and quantitative).
• Develop strong business case development (“business casing”) skills that can be universally applied to most investment decision making processes (i.e. NPV / IRR Analysis and articulating an investment case for a project or set of options).
• Exposure to financial modelling via development of Public Sector Comparator (“PSC”) models, the “financial forecasts” section of business cases and (on occasion) via the development of bid models for structuring.
• Development of astute commercial and negotiation skills.
• Develop a detailed understanding of the various stakeholders / participants within the infrastructure / infrastructure development and investment community (both public and private) and the relationship between various parties.
• Enhance your operational understanding of large scale infrastructure projects and assets (e.g. how roads / hospitals / train lines are built and operated).
• Develop a strong understanding of PPP’s and the complex political dynamic that drives infrastructure investment decisions.
• Build your professional network / personal relationships with the private sector (i.e. developers and associated members of the consortia), government (including central agencies and delivery authorities) and technical consultants (engineers and demand economists).

What to be conscious of:

• Mandates can often run for long periods of time – meaning you will develop a deep understanding of particular sectors / workstreams vs others in the team on different projects.
• The mix of private sector v public sector work can vary between the various teams across different firms and more specifically, be dependent on the specific Director / Partner you work with
• PSC modelling and associated financial analysis focuses primarily on cash flow modelling and the quantification of risk, as opposed to the development of three way integrated financial models that deal with analysis below EBIT
• Financial analysis and modelling is a small component of the overall remit of work undertaken by the group

Most common future employment outcomes (with only this skillset):

• Decision support functions within capital intensive corporates where you can utilise your investment appraisal / business casing skills.
• Positions within sub-divisions of government and / or independent bodies that leverage your knowledge of the public sector’s investment decision making process (e.g Department of Treasury & Finance / Transport Victoria / Linking Melbourne Authority / Infrastructure Partnerships Australia).
• Infrastructure Investors (unlisted investment management) – often when you’ve had demonstrable experience representing the equity side, supporting bid development activities and associated capital and tax structuring.
• Infrastructure Advisory or Infrastructure Coverage Teams within traditional advisors / investment banks (coupled with exceptional academics and demonstrable equity-side modelling analysis experience).
• In rarer instances, PPP origination or other bid development teams (again when coupled to exceptional academics and demonstrable equity and debt analysis experience)

Our advice to Infrastructure Advisory professionals wanting to move into a Corporate Finance, M&A Advisory or Unlisted Investment environment

When interviewing with Infrastructure advisory teams, ensure you ask about the mix of work the team undertakes, such as sector focus, track record / past mandates

If the opportunity arises, put your hand up for any bid-side advisory / bid development mandates that the team wins in order to gain exposure to tasks such as debt sculpting / debt sizing, modelling a variety of bank terms sheets, equity returns analysis and tax structuring analysis via SPV’s (amongst other workstreams).

Demonstrate to the market (i.e. employers) that you’re committed to transitioning into a corporate finance environment by committing to extra-curricular studies such as the CFA designation, a Master of Applied Finance or even short courses such as Wall Street Prep or Training the Street.