Podcast Summary: First Time Founders with Ed Elson – The Billionaire Who Built His Fortune on Infrastructure

Episode: First Time Founders with Ed Elson – The Billionaire Who Built His Fortune on Infrastructure
Host: Ed Elson
Guest: Michael Doral, CEO and Co-Founder of Stonepeak
Release Date: August 3, 2025

1. Introduction

In this illuminating episode of First Time Founders, Ed Elson sits down with Michael Doral, the CEO and co-founder of Stonepeak, a leading investment firm specializing in infrastructure. Michael shares his remarkable journey from an analyst at Macquarie in Australia to building a $73 billion portfolio at Stonepeak, all while maintaining an unblemished investment record.

2. Defining Infrastructure Investment

Michael begins by demystifying the concept of infrastructure investing, emphasizing its role as the "invisible backbone of modern life."

"Infrastructure is, I think, it’s well known to a lot of laypeople, airports, toll roads, electric utilities, really the building blocks of what the economy and what society sits upon."
[02:12]

He categorizes infrastructure into three primary sectors:

• Energy: Including oil and gas pipelines, wind turbines, and solar energy.
• Communications: Encompassing data centers, cell phone towers, and fiber optic cables.
• Transportation: Covering railroads, toll roads, ports, and logistics assets.

Michael highlights the stability and predictability of infrastructure assets, noting their natural monopolies and regulated environments that ensure consistent cash flows.

"They provide very stable, long-term, somewhat inflation-linked cash flows."
[04:03]

3. Michael's Career Journey

Michael recounts his early days at Macquarie in Australia, where he was thrust into complex deals with minimal guidance. This immersion accelerated his learning curve, teaching him resilience and adaptability.

"I was on a very, very deep learning curve. But I think most importantly, you learn to become comfortable in uncertainty."
[17:34]

His transition to Blackstone further honed his fundraising and investment skills, culminating in the decision to start his own firm, Stonepeak.

4. Founding Stonepeak

Faced with the saturation of Wall Street firms entering the infrastructure space, Michael and his partner Trent chose to carve their own path. Their strategy involved securing an anchor investor and leveraging existing relationships to successfully raise capital during a more favorable economic climate.

"Our first product was a $1.6 billion US-focused infrastructure product. And then over time we grew that product to now it must be around $25 billion."
[44:21]

Michael describes the emotional milestone of receiving their first paycheck from Stonepeak, symbolizing the fruition of their entrepreneurial efforts.

"My first paycheck, the first time I ever got paid from Stonepeak, I’ve got it framed on my wall."
[47:56]

5. Investment Philosophy and Strategies

Michael attributes Stonepeak's success to the inherent predictability of infrastructure investments. Unlike volatile tech stocks, infrastructure assets offer reliable cash flows, making them ideal for long-term growth through compounding.

"The spread of outcomes is enormous [in tech]. Whereas for one of these infrastructure businesses, the spread of outcomes is much narrower."
[49:47]

He draws parallels to Warren Buffett's investment strategies, emphasizing the importance of investing in businesses with strong moats and long-term viability.

"Buffett's two biggest exposures are infrastructure assets... he wants to know that he can go away for 10 years and come back and this business is still going to be there."
[51:58]

Michael also discusses the strategic approach to negotiations, focusing on finding unique opportunities where Stonepeak holds the upper hand.

"It's about finding circumstances where the balance of power is with the yes person with the money as opposed to the person with the asset."
[58:15]

6. Advice for Young Investors

Michael offers invaluable advice for aspiring investors and entrepreneurs:

• Embrace Early Risks:

  "Do it younger than you think... It takes so much energy and resilience."
  [27:53]

• Learn by Doing:

  "There's no substitute for reps... you've got to go out there and do it."
  [35:17]

• Value of Partnerships:

  "Having a partner is really important... you need someone who puts their arm around your shoulder."
  [21:10]

He underscores the importance of resilience, continuous learning, and the willingness to face and overcome failures.

"You're putting yourself out there and they're going to be better for it."
[42:58]

7. Role Models and Learning

When asked about his role models, Michael passionately cites Warren Buffett as his foremost influence, lauding his principles and investment acumen.

"I think Buffett is far and away the best investor I've ever seen... there's so many folks within those firms that I've taken a lot away from."
[65:15]

He also credits mentors from Macquarie and Blackstone for their pivotal roles in his professional development.

8. Conclusion

Michael Doral's story is a testament to the power of strategic thinking, resilience, and leveraging unique opportunities within niche markets. By focusing on essential infrastructure assets and maintaining disciplined investment strategies, he has built a formidable portfolio that stands the test of time. His insights offer invaluable lessons for entrepreneurs and investors alike, emphasizing that success often lies in the seemingly "boring" yet fundamentally crucial sectors of the economy.

Key Takeaways:

• Understand Your Asset Class: Deep knowledge of infrastructure provides a competitive edge.
• Embrace Early Risks: Taking on responsibilities early can accelerate growth and learning.
• Strategic Fundraising: Building and leveraging a strong network is crucial for raising capital.
• Long-Term Focus: Investing in predictable, essential assets supports sustainable compounding.
• Resilience and Adaptability: Navigating uncertainty and bouncing back from failures are essential traits for success.

For those inspired by Michael Doral's journey and seeking to delve deeper into infrastructure investing or entrepreneurship, his advice serves as a guiding beacon towards building enduring and impactful ventures.