Thấp thỏm trái phiếu quốc tế

(TBKTSG Online) - Không có vốn ngoại tệ giá rẻ trên thị trường quốc tế dành cho các tổ chức tín dụng Việt Nam lúc này và cả trong ngắn hạn, sau khi Ngân hàng TMCP Công Thương Việt Nam (Vietinbank) bán hết 250 triệu đô la Mỹ trái phiếu quốc tế kỳ hạn 5 năm với lãi suất cuống phiếu 8%/năm và lợi suất 8,25%. Giới chuyên môn cho rằng các tín hiệu xấu từ tình hình kinh tế vĩ mô của Việt Nam và sự thay đổi liên tục của thị trường thế giới đang là thách thức với các ngân hàng đi sau Vietinbank.

Phong trào “bán mình”

Không riêng Vietinbank, xu hướng tìm vốn ngoại tệ dài hạn trên thị trường quốc tế đã manh nha hình thành từ cuối năm 2010. BIDV (Ngân hàng TMCP Đầu tư và Phát triển Việt Nam), Vietcombank (Ngân hàng TMCP Ngoại thương Việt Nam), ACB (Ngân hàng TMCP Á Châu) và STB (Ngân hàng TMCP Sài Gòn Thương tín) đều có kế hoạch phát hành trái phiếu quốc tế trong năm nay với lý do muốn thay đổi cơ cấu nguồn vốn ngoại tệ dài hạn trước nhu cầu trong nước đang tăng cao.

Vietcombank đặt mục tiêu huy động một tỉ đô la Mỹ từ năm năm 2012, ACB dự kiến đợt đầu tiên sẽ bán 100 triệu đô la Mỹ, BIDV muốn ít nhất 500 triệu đô la Mỹ. Sacombank tại Đại hội đồng cổ đông ngày 26-5 cũng đã trình phương án phát hành 200 triệu đôla Mỹ trái phiếu quốc tế, kỳ hạn 5 năm, dự kiến phát hành vào quí 2 hoặc quí 3 tới.

Các ngân hàng trên là những ngân hàng có thế mạnh về ngoại tệ nhưng vẫn phải tính đường tăng thêm nguồn vốn ngoại tệ dài hạn. Bởi họ đã nhìn thấy nguy cơ cạn kiệt dòng vốn dài hạn ngoại tệ trong nước, khi mà nền kinh tế có nhu cầu đầu tư cho các dự án quy mô lớn mà sự có mặt của ngân hàng đôi khi mang tính sống còn. Nếu các ngân hàng trong nước không đủ sức, thị phần tài trợ vốn ngoại tệ dài hạn sẽ vào tay khối ngân hàng ngoại.

Xu hướng phát hành trái phiếu quốc tế của các ngân hàng thương mại được giới ngân hàng coi là xu hướng tất yếu. “Nguồn vốn đô la Mỹ giá rẻ trong nước đang khan hiếm, nhất là sau khi Ngân hàng Nhà nước áp trần lãi suất huy động 2% đối với đô la Mỹ, những nguồn vốn lớn và dài hạn khó huy động trong nước nhưng nhu cầu tín dụng ngoại tệ của nền kinh tế không suy giảm. Vì thế, việc huy động vốn ngoại tệ dài hạn và ổn định là cần thiết với ngân hàng. Chúng tôi cho rằng vấn đề lớn nhất với các ngân hàng Việt Nam hiện nay khi phát hành trái phiếu quốc tế là đưa ra được mức lãi suất vừa hấp dẫn các nhà đầu tư quốc tế nhưng lại đảm bảo chi phí không quá đắt để có thể kinh doanh có lãi khi dùng nguồn vốn này cho vay tại thị trường trong nước”, đại diện Vietinbank nói với TBKTSG Online.


Một trong đại diện các ngân hàng đang chuẩn bị phát hành trái phiếu quốc tế cho biết, cơ cấu vốn ngoại tệ trong các ngân hàng Việt Nam không khác nhiều cơ cấu nguồn vốn nội tệ, trung bình 85-90% ngắn hạn và còn lại là vốn dài hạn. Trong khi nhu cầu vay của thị trường tối thiểu nửa tổng nguồn vốn là dài hạn. Ví dụ với Vietinbank, họ cần bù đắp thiếu hụt về nguồn vốn đô la Mỹ hiện tại của ngân hàng và đáp ứng nhu cầu vay đô la Mỹ còn cao ở thị trường trong nước. Theo Báo cáo trái phiếu của Công ty cổ phần Chứng khoán Bản Việt, các khoản cho vay bằng đô la Mỹ của ngân hàng trị giá 2,5 tỉ đô la Mỹ, trong khi tổng lượng tiền gửi bằng đô la Mỹ chỉ có 1,3 tỉ. Vì vậy, ngân hàng phải vay thêm 1,2 tỉ từ các tổ chức tín dụng khác.

Không chỉ các ngân hàng, các doanh nghiệp lớn cũng khát ngoại tệ từ lâu. Tập đoàn Than và Khoáng sản (Vinacomin), Tập đoàn Điện lực (EVN), Tập đoàn Dầu khí (PVN) và nhiều doanh nghiệp lớn trong nước đều có kế hoạch huy động vốn trái phiếu quốc tế từ hai năm qua.

Vinacomin đã ra nước ngoài thực hiện một số chương trình giới thiệu (roadshows) năm 2010 song phải từ bỏ việc “bán mình” vì tín hiệu thị trường quá yếu. PVN cũng phải dừng lại kế hoạch gọi vốn trái phiếu quốc tế vì vụ việc Vinashin “bùng lên”, sự quan tâm của thị trường gần như không còn. Sang năm 2011, tình hình thị trường tài chính ngày càng khó khăn và lãi suất đi vay đô la Mỹ của Việt Nam trên thị trường quốc tế trong nhiều tháng đã lên mức rất cao, 11%/năm. Một số doanh nghiệp đành quay sang thực hiện những khoản vay thông thường bằng ngoại tệ nhưng giá vốn và các điều kiện đi kèm cũng không hề rẻ.

"Khẩu vị" thị trường luôn thay đổi

Không phải ngẫu nhiên mà tại các roadshow với nhà đầu tư quốc tế về đợt phát hành theo benchmark size (khối lượng chuẩn, theo thông lệ thị trường benchmarke size vào cỡ là 200-500 triệu đô la Mỹ) của Vietinbank cuối tháng 3 vừa qua ở Singapore, Hongkong, London, Boston, New York và Los Angeles, một phần ba các câu hỏi được giới đầu tư quan tâm đều liên quan đến chiến lược phát triển kinh tế vĩ mô của Việt Nam, tình hình các tổng công ty và các doanh nghiệp nhà nước, tình hình trả nợ của Vinashin, các vấn đề của hệ thống ngân hàng Việt Nam, sự khác biệt giữa chuẩn mực kế toán Việt Nam và thế giới...

“Khi họ đầu tư bất kỳ khoản nào, rủi ro phải được minh bạch hóa để sau đó, nếu họ quyết chấp nhận thì sẽ mua. Cái mà họ sợ là nói thì không rủi ro mấy nhưng thực tế xảy ra sau đó lại rất rủi ro”, ông Phạm Hồng Hải, Phó tổng giám đốc Ngân hàng HSBC Việt Nam nói. “Điều mà giới tài chính quốc tế băn khoăn là liệu rằng việc ứng xử với các khoản nợ quốc tế của Vinashin thời gian qua có phải là thói quen và tiền lệ của Việt Nam hay không? Với các doanh nghiệp nhà nước của Việt Nam, khi doanh nghiệp không trả được nợ thì sự hỗ trợ của nhà nước là gì?”, ông Hải nói tiếp.

Vì sao Vietinbank bán trái phiếu có vẻ suôn sẻ hơn các tổng công ty nhà nước trước đó? Ông Hải giải thích: “Cùng là doanh nghiệp quốc doanh nhưng giới đầu tư quốc tế nhìn thấy ngân hàng là một đặc thù so với công ty nhà nước khác ở Việt Nam. Vinashin sụp đổ, ảnh hưởng nặng nhất với lĩnh vực đóng tàu nhưng ngân hàng thì khác. Ngân hàng mất tiền không chỉ mất vốn của chủ sở hữu mà mất tiền của người dân đang gửi ở đó. Vietinbank có thị phần tín dụng và tiền gửi khoảng 14% toàn hệ thống, lớn thứ hai trong nước về giá trị vốn hóa và họ tin Chính phủ không để ngân hàng sụp đổ”.

Song, nhìn về dài hạn, ba vấn đề nhà đầu tư quốc tế luôn đặt dấu hỏi và coi như nút thắt cổ chai với nền kinh tế Việt Nam là: sự ảnh hưởng ngày càng rộng của khu vực nhà nước, đầu tư công và tái cấu trúc nền kinh tế và các ngân hàng. Kinh tế vĩ mô là cái bóng bao phủ mà các tổ chức phát hành không thể không đối mặt khi muốn vay nợ tại bất cứ đâu. “Kể cả khi doanh nghiệp có tốt đến mấy mà môi trường kinh doanh bất ổn thì nhà đầu tư vẫn lo ngại. Cái đó sẽ hơi khó cho các doanh nghiệp Việt Nam hiện nay”, ông Hải nói. So với các quốc gia như Sri Lanka, Philippines, Thái Lan, Indonesia thì Việt Nam vẫn bị coi là thị trường nhiều rủi ro hơn, bởi các quốc gia này sau khi giải quyết những bất ổn chính trị đã bật lên rất nhanh trên thị trường vốn quốc tế.

Theo báo cáo mới đây của Nomura về đợt phát hành của Vietinbank, các ngân hàng Việt Nam cần đặc biệt quan ngại hơn về 2 yếu tố: Tính minh bạch về chất lượng tài sản của các ngân hàng Việt Nam là khá yếu do sự dễ dãi trong việc phân hạng nợ xấu theo chuẩn mực; Sự hỗ trợ của chính phủ Việt Nam cho các doanh nghiệp quốc doanh có thể không mạnh mẽ như thị trường kỳ vọng, sau sự việc Vinashin vỡ nợ vào cuối năm 2010. Với mức nợ nần cao của các doanh nghiệp tại Việt Nam (sau một thập kỷ tăng trưởng tín dụng quá nóng), tình hình lạm phát, lãi suất cao, và tính thanh khoản yếu trong một số lĩnh vực, Nomura vẫn đang rất để phòng khả năng còn nhiều doanh nghiệp nhà nước sẽ vỡ nợ, khi mà Chính phủ có thể không cung cấp sự hỗ trợ tới toàn bộ các doanh nghiệp này.

Bộ phận nghiên cứu của Citigroup nhận định trong một báo cáo phát hành ngày 11-5: “Với tình hình tài chính yếu, được xếp hạng tín nhiệm ở nhóm thấp nhất trong hệ thống ngân hàng toàn cầu, kế hoạch của chính phủ sẽ bán thêm cổ phần tại Vietinbank, và sự thực về khả năng trả nợ của các tập đoàn doanh nghiệp nhà nước ở Việt Nam vẫn đang gây quan ngại, chúng tôi tin rằng các ngân hàng Việt Nam nên giao dịch ở mức giống như là mức rủi ro của trái phiếu ngân hàng của Mông Cổ với kỳ hạn 5 năm, tức khoảng 9-10%”.

“Trái phiếu là cuộc chơi của thời điểm và ăn nhau ở chỗ ‘chớp’ đúng thời điểm, vì những gì bán được hôm nay chưa chắc bán được vào ngày mai. Thị trường biến động cực nhanh và thay đổi liên tục nên vấn đề là người bán cần xác định rõ ngưỡng chấp nhận của mình đến đâu”, Tổng thư ký Hiệp hội thị trường trái phiếu Việt Nam Đỗ Ngọc Quỳnh nói.

Trong nước, việc huy động nguồn vốn đô la Mỹ trung dài hạn là hầu như không khả thi, đặc biệt là tại các kỳ hạn ba năm trở lên trong khi các ngân hàng cần ngoại tệ dài hạn, mà đợi thì đến bao giờ? Trong khi kinh tế thế giới xì xụp cả năm qua và các tín hiệu xấu từ châu Âu chưa biết bao giờ chấm dứt? Ở trong nước, tình hình kinh tế vẫn tiếp tục khó khăn. Đó là lý do nhiều đề án phát hành trái phiếu ngoại tệ đang nhấp nhổm trên bàn các ngân hàng, doanh nghiệp lớn.

Source: http://www.thesaigontimes.vn/Home/taichinh/nganhang/77207/Thap-thom-trai-phieu-quoc-te.html

Risk management: regulatory scrutiny pushes risk centre stage

The practice of risk management has been transformed in recent times from one that used to look mainly backwards to one in which foresight and prediction are the keys to the game.
Risk monitoring and compliance have moved centre stage since the global financial crisis, driving the need for ever more advanced systems that attempt to capture the many and varied risks involved in the markets of today.

Ian Castledine, global head of investment risk and compliance product at Northern Trust, points out that five to 10 years ago, for the majority of pension funds, most risk measures were largely backward looking whereas now predictive models are much more the norm.

“Since the credit crunch the focus has been on counterparty risk, liquidity risk, transparency – in terms of the ability to understand what is going on in your portfolio at a security and derivatives trade level – and credit.”

He adds that with all of these factors efforts are made to integrate implied metrics into asset owner models. “For example, we are launching a credit dashboard that ties together the credit rating with a host of different metrics and paints a rich tapestry as a result. We also focus on how pension schemes use the analytics we provide. We have made efforts to break down and simplify the ‘technical talk’ into more easily understandable data and analytics,” he says.

Underlying much of the explosion of interest in risk management and compliance is heightened regulatory scrutiny. This has led many market participants to outsource to specialist risk managers the task of introducing the checks and balances necessary to satisfy regulators that their business is being conducted in the most prudent and transparent way.

Mr Castledine says regulatory change has created an immense area of opportunity across a number of industries, highlighting the examples of servicing Nordic banks for Solvency II or the pressure on Dutch pension funds to be fully transparent.

Companies are investing heavily in risk management tools against the backdrop of frequent regulatory change and the new climate of caution in the wake of the crisis.

As a result, providers of analytical tools have recently become sought-after acquisition targets. Evidence of this came earlier this month as IBM made its second analytics-related acquisition in a week, seeking to expand its offerings for risk management for financial services and related companies.

The company is buying Algorithmics, a Toronto-based provider of risk analytics and services to bank and other investment companies, for $387m. That follows its planned purchase of UK-based fraud prevention analytics provider i2 Group. It also bought OpenPages late last year to address operational risk. Indeed IBM has spent over $14bn on 26 analytics-related purchases in the past five years, expecting the market for analytics to be over $200bn by 2015.

IBM’s buying spree is further evidence that companies are increasingly recognising that their risk management monitoring must cover a vast array of potential factors.

One head of risk described what he was seeing as a new generation of client and risk monitoring characterised by the global trend of moving towards dynamic indicators, and away from a reliance on any one analytical measure.

New risks are continuing to be factored in to risk models. These include so-called frontier risks such as environmental and carbon, which were previously not quantified. Broadly, clients want their risk management providers to be able to capture, quantify and predict as broad an array of measures as possible.

Existing risk management providers are upgrading their services in the face of heightened competition. For example, Algorithmics, a provider of integrated collateral management and liquidity, regulatory and reporting solutions for the financial services industry, this month unveiled a new version of its regulatory reporting platform.

Within the asset management business itself, acquisitions have also been taking place.
For example, Natixis Global Asset Management announced earlier this month it had acquired a controlling interest in Darius Capital Partners, an investment advisory and research firm that provides customised hedge fund solutions to address institutional investors’ growing needs for transparency, liquidity and risk management. Such acquisitions are likely to be increasingly common as asset managers attempt to upgrade the risk management capabilities they can bring to the table.

Source: http://www.ft.com/intl/cms/s/0/aaf4a432-d923-11e0-884e-00144feabdc0.html#axzz1etVluwVV

How investors can get more out of infrastructure

Rarely have investments in global infrastructure—everything from roads, bridges, and tunnels to schools, hospitals, and power plants—held the spotlight as they do now. Governments around the world are increasingly comfortable using private money to finance such projects, while investors have poured large sums into specialist funds in hopes of obtaining attractive inflation-adjusted returns. From 2006 to mid-2007, we estimate, private investment funds raised $105 billion for infrastructure projects.

All of this interest heightens competition and creates a problem for fund managers and investors seeking profitable infrastructure opportunities. If funds follow the crowd, bidding to operate existing assets under a business-as-usual model, they run a double risk because of the sheer volume of dollars now chasing deals and driving up prices: either they lose out to more audacious competitors, or they risk overpaying and achieve suboptimal returns. Yet funds are under growing pressure to invest the money they raised. They can’t sit on the cash indefinitely.

So infrastructure investors must raise their game in two ways. First, they should become better at extracting value from projects by improving their operational capabilities. Second, they ought to use this more sophisticated operational perspective to assess the risks of nontraditional infrastructure deals—such as those that involve complex operations, emerging markets, or new assets.

If this story sounds familiar, it should: private-equity firms followed a similar path over the past decade. Leading ones evolved their business models to create value from not only financial engineering but also managerial and operational improvements; at the same time, they gained the confidence to invest in more and more complex businesses. By learning the same lessons—and understanding best practice from industries, such as oil and gas, that routinely face the same sort of complexity in unfamiliar locations—infrastructure funds should produce returns that will keep investors happy.

The money is here—what about the deals?

During the past two years, the flood of money into infrastructure funds has been astonishing: the world’s 20 largest now have nearly $130 billion under management, 77 percent of it raised in 2006 and 2007 and about 63 percent from new entrants. Taking into account leverage, a billion dollars of equity funding could, in some situations, pay for up to $10 billion in projects.

Where will all the money go? The value of infrastructure buyout deals has already grown from roughly $20 billion in both 2003 and 2004 to $106 billion last year. The volume of the developed world’s remaining traditional brownfield opportunities—those in existing infrastructure, such as owning and operating a toll road—won’t satisfy investor demand over the next three to four years. Bidding for these deals is already intense,¹ which has pushed up price-to-earnings multiples. The multiple of 9 achieved by Italy’s Aeroporti di Roma when it was sold in 2002, for example, is dwarfed by the multiple of 27 that investors paid for the UK’s London City Airport in early 2007; in the ports sector, the multiple of 9 paid for Hesse-Noord Natie in 2002 was less than half the multiple of 20 achieved by Orient Overseas in 2006. Meanwhile, in North America the competition for road projects has become increasingly heated —as seen in the multiples commanded by the Indiana Toll Road and Chicago Skyway deals. High valuations mean that funds must work much harder to generate satisfactory returns.

Investors hoping to avoid these sky-high valuations can target more attractive deals if they are willing to look beyond existing infrastructure in developed economies and consider the following:

• projects in emerging markets—which, we estimate, will require more than $1 trillion in capital over the next ten years
• complex brownfield deals, which typically have a substantial construction element because of the upgrade and refurbishment work involved
• wholly private infrastructure opportunities, such as private industrial rail lines and power plants or the full privatization of infrastructure providers

Exhibit 1 shows what this approach might mean for the global transport sector. Of the $360 billion of transport-related projects we have identified from now until 2010, around $305 billion are either located outside the Organisation for Economic Co-operation and Development (OECD) countries or lack established income streams.

New types of deals, of course, expose investors to a large number of new risks, many of them difficult to quantify. If not managed, such risks open fund managers to the charge that they are straying into projects that look more like traditional equities than like infrastructure. But managers who don’t consider nontraditional projects will shut themselves out of the lion’s share of the opportunities in coming years.

In this more bracing environment, funds need a new approach. Most investors have typically created value through financial engineering and rising user demand. They have acted less aggressively to improve operations; indeed, many financial investors still leave such issues to contractors and focus their governance efforts on financial metrics.

The old business model is ill suited to capturing the opportunities in today’s competitive market. Infrastructure investors must not only spot ways to improve operating cash flows before committing their capital but also ensure that they have the knowledge and expertise to enhance the value of a highly priced asset once they own it. Moreover, they have to anticipate and assess the operational complexity of any nontraditional project in order to understand and manage the risks of bidding for it.

For funds that can master infrastructure operations, the prize is twofold: a better chance of winning traditional deals and making them profitable, as well as the ability to bid for more operationally complex and less competitive types of infrastructure. These strengths also give investors the confidence to walk away from overpriced deals.

The devil’s in the operations

One key attraction of infrastructure investments is the prospect of reasonably straightforward operations: there is less scope for management discretion in running a bridge, for example, than a global retail chain or a software house—not, of course, that such investments leave no room for operational improvement or can’t create significant value. This straightforwardness is a characteristic not only of the roads sector, traditionally seen as one of the most operationally undemanding categories of infrastructure, but also of more complex categories, such as airports, power plants, and transit systems.

Exhibit 2 highlights the performance of five leading infrastructure-management companies active in a single EU country. Despite the common working environment, the operations and economics of each company’s toll collections, motorway patrols, and routine maintenance work are quite different. In fact, all of these companies showed room for improvement in one or more aspects of the business—no single contractor was best across the board.

Our work with road operators provides many examples of operational improvements and feasible savings. Some techniques are sophisticated, such as restructuring procurement systems to bring in smaller raw-material companies and thus make suppliers more competitive. Others are strikingly simple: for instance, designing the shape of embankments to minimize construction time or drafting winter maintenance contracts in order to reduce unnecessary salting and sanding. In projects that involve existing roads, experience suggests, a proactive investor could cut its costs by 9 to 16 percent in present-value terms by raising the operations of European or North American highways from average to best in class. That would certainly allow a bidder to be a touch more aggressive—say, by offering 22 rather than 20 times EBITDA²—and also preserve acceptable rates of return. While a change of this magnitude isn’t transformative, it has the potential to make the difference between winning and losing a bid or to help an investor recognize that it’s time to walk away.

The importance of operational improvements grows as infrastructure projects become more complex. Macquarie and Ferrovial’s coinvestment in the UK’s Bristol International Airport, for example, involved upgrading signage systems; renewing check-in, baggage reclaim, and catering facilities; rerouting foot traffic; and installing all-weather landing equipment. The investors also rejuvenated the airport’s retail offering, strengthened the management and sales teams, and even tweaked the system for booking parking spaces. In the four years after the acquisition, the number of passengers using the airport doubled—as did its EBITDA. More recently, the management of the airport had to address operational concerns over its runways to ensure the project’s continued success. Ferrovial’s subsequent acquisition of the British airports operator BAA has involved complex decisions about airport logistics, security, management restructuring, regulatory strategy, and investment priorities. It would be unthinkable for an investor with no expertise in the transport sector to make these decisions.

Even the apparently straightforward business of rail maintenance offers room for greater efficiency. Work with a range of OECD rail operators suggests, for instance, that implementing best-practice procedures in maintenance scheduling, repairs, purchasing, and overhead management can cut annual upkeep costs by 15 to 30 percent. Routine maintenance is usually just the start of the challenge, however. Complex decisions about signaling systems, integration with other networks, and negotiations with rail operators all offer further scope for operationally savvy investors to distinguish themselves from less sophisticated ones.

Again, these realities should come as no surprise to anyone who has followed the development of the private-equity industry. A McKinsey analysis of 60 completed private-equity deals showed that over 60 percent of the value they created arose from improving the performance of companies (that is, raising revenues and margins or redirecting corporate strategy) rather than financial engineering, arbitrage, market timing, or sector appreciation.³

Mastering investment risk

Operational understanding and operational capabilities are essential for assessing and managing risk. The ability to deal with risk is in turn a prerequisite for investing in projects—in particular, greenfield projects, deals in emerging markets, and complex schemes—that might scare other bidders. It is also required to know which deals to avoid.

When investors deal with a familiar type of brownfield infrastructure project in a well-understood geography, assessing and managing risk is relatively straightforward. They can typically assess the levels of demand risk, maintenance cost risk, and political risk, if any; factor the financial impact of unexpected events into a bid; and track such problems over a project’s life.

The number and magnitude of the risks increase if a project involves building a new asset, operating in a complex or untested regulatory environment, or bidding for an asset that has complex interdependencies with other projects. McKinsey’s work with leading developers in the oil, gas, and energy sectors, where complex billion-dollar-plus projects in unfamiliar locations are a fact of life, highlights practices that infrastructure experts can use to advantage.

In the preproject phase, for example, successful developers tailor their project-development and risk-management processes specifically to the venture in hand rather than rely on standard processes. They assess various types of risk in a structured way, avoiding unwarranted focus on a single category, such as technical delivery or regulatory compliance. To do all this, and to reduce the dangers of faulty intuition or any bias toward optimism, they quantify and prioritize risks wherever possible and regularly revisit their estimates.

Once a project is under way, good governance is the key to managing risk. Leading developers ensure single-point accountability wherever possible, giving project teams direct control over the resources needed to complete the work and avoiding matrix or functional structures. To prevent silos from developing as projects unfold, a centralized integration function should regularly and rigorously review them to ensure that they are on track or, if they aren’t, that corrective measures are taken swiftly. Finally, successful developers implement appropriate financial incentives to make sure that the owners of risk manage and optimize it.

Investors incapable of assessing risk accurately may come to grief. Consider the early difficulties in building the Channel Tunnel between France and Britain. The initial winners of the contract, in 1986, did little work on detailed design and produced cost estimates that one recent study described as “more or less rough guesswork.”⁴ A subsequent change of ownership at Eurotunnel led to the appointment of a new management team, a more detailed assessment of risk, and tighter contracting terms. In the end, the massive project was completed close to deadline, though at a cost substantially above initial estimates (see sidebar, “Effective infrastructure investment: The public-sector perspective”).

The energy industry provides more recent examples of the importance of assessing and managing risk. Increasingly, developers such as Marubeni undertake lump-sum turnkey projects to build power plants (Middle Eastern ones, in Marubeni’s case), taking ownership of construction risk and creating the incentives and processes needed to manage it. A leading oil company assesses a major investment’s probability of success by developing scenarios and stochastic models and then uses its findings as a yardstick for measuring the effectiveness of plans to mitigate any risks. Such lessons are just as useful for investors in infrastructure, as well as the funds that finance it, because this kind of project integration and control is something they are well positioned to provide.

Likewise, successful private-equity funds have been defined in part by their exceptional ability to assess and manage the risks in their portfolios of companies. In the 1990s, Nomura’s Principal Finance, a leading buyout firm of the time, purchased state-owned Angel Trains, one of the UK’s three lessors of passenger rolling stock. It then proceeded to demonstrate how much such firms could achieve. Nomura conducted a detailed due diligence and financial analysis to demonstrate that Angel’s future cash flow was more secure than other bidders realized and that they had exaggerated the safety risks. These efforts allowed Nomura to bid competitively in what was then an untested asset class. Refusing to accept the incumbent management’s claims, Nomura itself also assessed the possibility of raising Angel’s operating efficiencies. After winning the auction, Nomura quickly set new objectives for Angel, reorganized its management to achieve them, and kept a close eye on the operational risks already identified. The lesson—that good risk management not only reduces the potential downside but also creates an additional upside—holds true for today’s infrastructure investors as well.

Next steps for funds

Infrastructure investors and the funds they subscribe to must take important steps—one strategic, the other organizational—that will make them better able to improve both the operations they oversee and the way they deal with risk. First, they should focus on a manageable range of sectors where they can apply real insights that will help them source transactions, pay appropriate prices, and extract maximum value. Second, they should create a team of in-house experts to assess and manage the risks. Much as large buyout funds have moved on from the “three bankers and a Rolodex” model, so too infrastructure investors will probably need to start hiring people with experience beyond investment banking or commercial financing. They should consider former asset operators, risk managers from financial institutions, and former officials of government infrastructure departments.

The benefits of focus

Many of today’s new infrastructure funds were set up with a broad remit that helps them attract new capital quickly—their offering memoranda give them enough flexibility to target a wide range of infrastructure types in a wide range of countries. This kind of freedom has to be managed carefully; bidding reactively for projects in many disparate sectors probably won’t create value if a fund lacks the relevant expertise. Successful infrastructure players, such as Macquarie, direct their investments to high-potential areas in which they have the knowledge and capabilities to create a sustainable advantage.

One critical step for a new fund is to consider what distinctive skills, experience, and networks it can use to create value. A larger institution, such as a bank, that sets up a fund may have expertise in a particular region, industrial sector, or deal structure. Some of Macquarie’s early funds, for example, had a tightly defined focus on highways, airports, or South Korea.

Focused strategies can be particularly effective for smaller players. In the late 1990s and early 2000s, for instance, investors with experience in the UK debt and project finance markets began building equity positions in infrastructure undertakings launched under the UK government’s Private Finance Initiative (PFI). These projects were too small for larger generalized investors—and for many of today’s new funds. But smaller, more specialized ones, such as the Secondary Market Infrastructure Fund (acquired last year by Land Securities Trillium), have successfully built up portfolios of positions in UK infrastructure projects.

Developing in-house expertise

In the short term, investors can outsource some operational and risk-management functions to advisers, just as private-equity firms do and as infrastructure investors themselves do for demand forecasting and for legal and taxation due diligence. They can also rely on coinvestors or subcontractors to provide advice.

Relying on coinvestors with industry experience, such as construction or facilities-management firms, is often a successful approach. Some of these relationships, notably the fruitful partnerships between Macquarie and Ferrovial, have endured across a number of deals. But funds should think twice before depending exclusively on industrial coinvestors for operational insights and advice. As the European road-management analysis mentioned earlier shows, no operating company can claim to be a market leader in every aspect of operations. Since similarly uneven patterns can be found in other areas of infrastructure, funds risk losing value by locking themselves into a single partner.

Moreover, investors relying solely on the operational expertise of construction and maintenance firms may expose themselves to conflicts of interest: these businesses often perform a dual role as shareholders in infrastructure projects (and thus receive dividends) and as operators performing specific tasks (and receive fees, like any other contractor). Rumors circulate that in early infrastructure deals, financial investors lost out to subcontractors they had relied on for operational guidance. At the very least, a fund must know a business well enough to hold the managers of the investment project and the contractors accountable no less for operational than for financial targets and to form an independent view of the operational improvements achievable.

Leading private-equity firms, such as Texas Pacific (TPG) and Kohlberg Kravis Roberts, have increasingly developed the expertise to carry out much of the core due diligence and operational governance themselves, so they can execute complex and operationally demanding transactions with confidence. Infrastructure players like Macquarie and Henderson’s Laing subsidiary have adopted the same approach; both can rely on significant teams of operational experts to undertake due diligence for deals and to support the management of projects.

Opportunities to invest in global transport and other types of infrastructure—to build and operate new projects and manage old ones—are set to increase in the next few years, but so will competition for deals. A fund can position itself to stay ahead of the competition and improve its chances of securing healthy returns if it deepens its knowledge of operations, improves its ability to assess the risks of individual deals and to manage them, and develops the in-house skills to institutionalize these capabilities.

Effective infrastructure investment: The public-sector perspective

More intense bidding for infrastructure projects generally increases the amounts paid to governments for the right to run existing assets and reduces the cost of constructing new ones. Yet overexuberant bidding can clash with the public’s best interests and undermine the provision of services. Governments should entrust such projects to smart investors who understand their operating realities and risks. Although public-private partnerships give governments strong protection if the private sector fails to deliver, failure is rarely painless for any of the parties involved. The UK’s National Physical Laboratory is a case in point. Built under the UK government’s Private Finance Initiative (PFI), the project went substantially over budget, creating serious financial difficulties for one of the investors. The public sector didn’t foot the bill for these problems, but the facility was delivered late as a result of its complex financial restructuring.

Source: https://www.mckinseyquarterly.com/Financial_Services/Investment_Management/How_investors_can_get_more_out_of_infrastructure_2105