Infrastructure recruitment on a roll

New fund openings and rising M&A activity among the likes of port businesses and airport operators are fanning already overheated demand for people familiar with the foibles of the infrastructure sector.

"Banks, accountants and private equity funds are looking for infrastructure specialists," says Simon Stevenson, managing director of search firm Stevenson James. "Banks need infrastructure specialists to work as advisors on M&A teams, private equity funds are increasingly investing in infrastructure, and accountancy firms need infrastructure specialists to work on PFI deals. Everyone is fighting for talent across the board."

Royal Bank of Canada joined the foray this week with the addition of Charles Berkeley, a corporate financier from Dresdner Kleinwort, as a managing director in infrastructure finance within its corporate and investment banking division.

A flurry of infrastructure-related deals and new fund openings underpin the enthusiasm for recruiting in the sector. A consortium led by Goldman Sachs is in the process of purchasing Associated British Ports for an impressive 3.4bn. Another led by Spanish construction group Ferrovial is attempting to purchase BAA, the British airports operator for a jaw dropping 10.1bn. Morgan Stanley recently announced the launch of a new infrastructure investment fund. And GE and Credit Suisse are embarking upon a $1 billion joint venture to invest in 'energy and infrastructure assets.'

Stevenson says banks' infrastructure staffing requirements are focused at analyst and associate levels. But he says private equity firms are looking for people with four or five years' experience: "Banks are a favourite source of talent."

Whether infrastructure bankers will want to go and work in infrastructure funds is another question however. Returns on infrastructure investments are reliable rather than spectacular and funds appear less able to pay the generous levels compensation associated with other areas of the private equity industry.

Stevenson says an associate director in an infrastructure fund with six years work experience can earn a base salary of 65,000 to 75,000, plus a bonus of 100%, with the addition of carried interest paid when the fund terminates. By comparison, top performing M&A bankers with five years' experience can earn 200,000 plus - and they don't have to wait for carried interest.