Project Finance Backtested

Looking back in time is something I recommend risk managers should do from time to time and this week drove me to do just that. In this short blog posting, we are going to take a peep at why and how it is essential for risk managers to see how well they are truly doing and that comes from looking back, it’s more healthy than you may believe, especially if you are honest with yourself.

Valuation Steps Part 2

A couple of days ago I published an article that mapped out the efforts required to perform a complete valuation of a new project or entity, and that article [LINK] seemed to have generated a lot of curiosity.  In this sequel to the Valuation Steps posting, we are going to take a slightly deeper look at how to identify specific the parameters which are needed to perform a Discounted Cash Flow valuation.

Valuation Steps

Product managers, corporate risk assessors, project managers, project financiers and many other types of business analysts often need to value uncertainty in their business strategies. In this small blog posting we take a look at the steps that would generally be followed for a typical sound valuation of 'corporate risk'.

Financially Evolving Big Pharma

Working with a wonderful group of industry experts at the huge Bio Pharma event in Singapore. Our presentation can be found at the end of this blog.

ISO 31000 for Property Development

It states in the ISO 31000 standards guide, that organisations of all types and sizes face internal and external factors as well as influences that make it uncertain whether and when they will achieve their objectives.

If we were to look at property development or the construction industry for example, we know that these types of issues are also likely to be evident. So, would ISO 31000 be of benefit to the construction sector?

In this short journal post, we share a presentation that reviews some of the problems of risk management in property development, how risk management currently functions in this industry sector and why it would be advantageous to adopt ISO 31000 in property development.

Part 1-Beta Headaches & Project Finance Risk

New model for project finance risk measurement

When a company chooses to fund a project, it can do it in three key ways.   It can raise equity capital by selling shares on the market, sometimes in a private way.  It can borrow either internally from cash reserves by reinvesting profits or it could borrow from a lending institution or even issue bonds in the market.

The idea is that the cost of equity or debt (most projects have a mixture of both) should be representative of the risk within the project. The higher the risk the project has; the more volatile the earnings are likely to be and that will follow through with a larger beta factor as a consequence. 

A Real Option framework for Dispute Management

Can risk management practices and instruments be used to solve disputes?

Before I leap into this article, I need to set some boundaries because I am sure this topic is likely to solicit potential criticism without clear delineation on what we are talking about. Perhaps I should say what is not in scope to make that simple.

What a risk management or specifically a real option framework for dispute management cannot fix is an ideological dispute. However, it can potentially solve a dispute around scope creep and conflicts of interest.

Let's see.