Welcome back to the Alt Goes Mainstream podcast.
Today’s episode dives into the evolution of infrastructure investing with a leading scaled specialist firm in infrastructure.
Mike is the Chairman, CEO, and Co-Founder of Stonepeak, building the foundations for the firm to achieve a rapid ascent to $76B from its founding in 2011.
Mike brings deep expertise to bear in the infrastructure asset class. He has over 20 years of experience investing in infrastructure, starting his career at Macquarie, where he ultimately held the title of Senior Managing Director. He then joined Blackstone, where he was a Senior Managing Director in Private Equity and Co-Head of the Infrastructure Investment group, before striking out on his own to build one of the industry’s largest infrastructure investing firms in Stonepeak.
Mike and I had a fascinating and thought-provoking discussion about infrastructure investing and why it’s becoming an increasingly important part of the private capital ecosystem. We covered:
- The early days of infrastructure investing.
- How infrastructure investing has evolved.
- How Mike’s experiences at Macquarie and Blackstone informed how he wanted to build Stonepeak.
- How institutional investors have approached infrastructure investing and why individual investors should consider exposure to infrastructure assets.
- Stonepeak’s DNA and what makes the firm different from other infrastructure investors.
- Why being a scaled specialist is a competitive advantage.
- How Stonepeak was built from scratch to scale.
- How Stonepeak identified investing in data centers early on and well before the data center boom began.
- Why launch a wealth solutions business and how it’s a reflection of the firm’s DNA, culture, and values.
Thanks Mike for coming on the show to share your expertise, wisdom, and passion for infrastructure investing.
A word from AGM podcast sponsor, Ultimus Fund Solutions
This episode of Alt Goes Mainstream is brought to you by
Ultimus Fund Solutions, a leading full-service fund administrator for asset managers in private and public markets. As private markets continue to move into the mainstream, the industry requires infrastructure solutions that help funds and investors keep pace. In an increasingly sophisticated financial marketplace, investment managers must navigate a growing array of challenges: elaborate fund structures, specialized strategies, evolving compliance requirements, a growing need for sophisticated reporting, and intensifying demands for transparency.
To assist with these challenging opportunities, more and more fund sponsors and asset managers are turning to Ultimus, a leading service provider that blends high tech and high touch in unique and customized fund administration and middle office solutions for a diverse and growing universe of over 450 clients and 1,800 funds, representing $500 billion assets under administration, all handled by a team of over 1,000 professionals. Ultimus offers a wide range of capabilities across registered funds, private funds and public plans, as well as outsourced middle office services. Delivering operational excellence, Ultimus helps firms manage the ever-changing regulatory environment while meeting the needs of their institutional and retail investors. Ultimus provides comprehensive operational support and fund governance services to help managers successfully launch retail alternative products.
We thank Ultimus for their support of alts going mainstream.
Show Notes
00:00 Message from our Sponsor, Ultimus
01:18 Welcome to the Alt Goes Mainstream Podcast
02:10 Guest Introduction: Mike Dorrell
03:58 Mike's Journey to Stonepeak
06:46 Challenges in the US Infrastructure Market
11:09 Successes and Setbacks in Infrastructure Deals
12:06 Privately Held Infrastructure in the US
17:05 Public vs. Private Infrastructure
18:34 Impact of Infrastructure on Daily Life
19:16 Stonepeak's Significant Market Presence
22:10 Balancing Public Good and Investor Returns
22:53 Regulation and Good Judgment in Infrastructure
23:55 Challenges in Privatization
25:52 Skills Needed for Infrastructure Investing
26:29 Access to Infrastructure for Individual Investors
27:10 Institutional Market's Experience with Infrastructure
30:50 Asset Allocation and Infrastructure
33:40 Private Equity vs. Infrastructure Investments
34:10 Institutional Allocation Trends
34:46 Patience and Peace of Mind in Investing
35:14 Warren Buffet's Investment Philosophy
35:38 Biggest Risks in Infrastructure
35:50 Electric Utility Asset Risks
36:28 Data Center Business Risks
37:02 Evaluating Data Center Investments
38:46 Economic Differences: Building vs. Buying Data Centers
40:21 Pricing Power in Data Centers
46:03 Connectivity Data Centers Explained
49:16 Navigating Infrastructure as an Asset Class
50:09 Finding the Right Assets at Fair Prices
50:27 The Evolution of Infrastructure Investing
57:20 Raising Capital in Early Days
59:46 Lessons from Blackstone
01:01:22 Building a Strong Investment Culture
01:03:37 Maintaining Culture While Scaling
01:06:20 The Importance of the Wealth Channel
01:07:41 Focus on Quality and Customer Experience
01:08:33 Cycling and Business Philosophy
01:09:26 The Importance of Investment Decisions
What is Alt Goes Mainstream: The Latest on Alternative Investments, WealthTech, & Private Markets?
Alt Goes Mainstream podcast is the place to turn to for interviews with some of the brightest and most experienced minds in the world at the intersection private markets and wealth management. AGM dives into investment strategies like private equity (PE), private credit, venture capital (VC), secondaries, GP stakes, infrastructure, real estate, wealth management, and comprehensively covers tools and frameworks for approaching private markets, such as asset allocation, evergreen funds, model portfolios, and more. For anyone looking to invest into private markets (from experienced wealth managers to family offices to the individual investor looking for a more diversified investment portfolio), you’ll hear inside stories from executives and founders at some of the world’s largest financial institutions, alternative asset managers firms, and wealth management firms. More than a personal finance podcast, Alt Goes Mainstream dives deep into trends, investment strategies, firm building lessons, and innovative technologies that are enabling investors to access private markets.