Winds of change or staying the course?

It’s been an intriguing year in the world of infrastructure, energy transition and renewables development; sectors that are currently experiencing huge inflows of capital and yet not without some serious challenges, particularly in the ‘higher for longer’ interest rate environment we now find ourselves. Can technological advancements, innovation and the Aussie entrepreneurial spirit help to offset these significant challenges across generation, grid connectivity, pricing and shareholder expectation?  

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In a continuation of previous years, fewer high-quality established infrastructure assets are coming up for sale, which has shifted the focus - for both sponsors and corporates - to investing in greenfield development projects, often at a much earlier stage. We have seen significant growth in renewable energy platforms created or purchased by investment managers, specifically for this purpose, and they have steadily been building their teams and capabilities in 2023.  

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In saying that, it’s not all sunshine and solar farms... From the highs of 2021 and 2022, we’ve definitely noticed a decrease in the volume and frequency of available positions within the Australian infrastructure and renewables market, broadly in line with the decrease in overall M&A deal activity. This presents challenges, but also creates opportunity for the resourceful among us.  

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In the advisory space, opportunities are more limited now than we have seen in the past three years, albeit confidence does seem to be building again towards the end of this year. The coverage teams of the bulge brackets have been facing slower deal flow and pressure to cut costs from global head offices, with a few teams seemingly winning the lion’s share of high-profile mandates.  

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The ever-present allure of the bigger and opportunity-rich markets overseas (Europe and the U.S. in particular) continue to entice junior candidates to pack their suitcases and experience life in the ‘Big Smoke’.

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Several of the specialist independent and boutique infrastructure and renewables advisors have been reaping the rewards of a busy mid-market and the continued funding of Australian projects by international investors with deep pockets and lack of local market expertise. This has enabled them to bolster their ranks and challenge for bigger and higher profile mandates.

Those hopeful of building a career with a major domestic or global infrastructure or energy sponsor, or seasoned heads seeking a fresh perspective, will be put through their paces in robust hiring processes; with multiple interviews, case studies and psychometric testing now the norm. These teams continue to hire, albeit at a slower pace than the previous couple of years, and with a renewed focus on securing high quality individuals who can deliver consistent results whilst bringing fresh and unique insights to experienced investing teams.  

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At the junior levels - love it or hate it - strong financial modelling skills continue to be highly valued, with the need for accurate and insightful analysis more integral than ever. We are also seeing increased demand for capital markets and treasury professionals within the larger development platforms, as competitive funding and financial stewardship in a higher cost environment becomes even more crucial to reaching and maintaining profitability.  

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ESG specific positions are also on the rise; with advisory businesses looking to capitalise on the growing demand for this expertise, either by setting up a dedicated team or adding resources to their broader M&A, capital markets or project finance offering. For fund managers and infrastructure developers, being able to communicate and deliver tangible and measurable ESG goals will be increasingly important as time goes on. We expect to see more roles being created where these key responsibilities will be fulfilled.  

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Looking to 2024, it’s hard to see any significant changes happening in the first half of next year. What remains certain is that the required push towards ‘net zero’ means the appetite to set capital to work in these core areas of investment is undiminished. That bodes well for career opportunities across the spectrum; from financiers to advisors, investors to C-suite executives.  

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We look forward to connecting with a broad range of talented individuals throughout the year ahead and are always interested to gain unique perspectives across the market.

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If you would like to connect and discuss hiring, please feel free to get in touch with me on redward@eastpartnership.com.au or keep tabs on our latest openings on our website, under Opportunities.