Harnessing the power of "big data" style analytics to inform decision-making in the development and financing of infrastructure projects
Many proposed major infrastructure projects face substantial uncertainties in relation to patronage levels, customer pricing and other key drivers of performance and profitability. This makes it particularly challenging to develop meaningful financial cost benefit analysis. More broadly, at early stages of policy development, uncertainties of this nature may inhibit the development of projects due to concerns that they could "never be privately financed".
By using advanced statistical analysis techniques to identify the ranges of outcomes that are statistically likely to occur, and their implications for policy, commercial and financial outcomes,
our advice on infrastructure project development and implementation brings new levels of sophistication to some of the largest and most challenging investment decisions. As a result, we have been able to identify new ways to unlock private sector capital, and we have been able to ensure materially greater financial resilience in the face of adverse conditions.
We provide examples of the power of our approach below.
Making vision into reality
Watch Joint CEO Nigel Lake speaking at Australia's Parliament House on how private finance could be used to deliver and finance one of the longest proposed HSR networks in the developed world.
Faced with a mass of conflicting data and information, the largest business decisions typically rely heavily on judgement.
In "Magic, Reason or Experience?", Pottinger Joint CEO argues that it is time for a new methodology for decision-making that embraces the uncertainties inherent in the world and uses all the available data.
The future is already here: you just need to know where to look
In 2013, Pottinger's "Nate Silver-style" forecasts of the outcome of the Australian Federal election provided real insight four months before election day.
We broke new ground by integrating betting odds with polling data, to address the challenging of much less granular information than available in the USA.
Finding hidden gold:
Pottinger has developed a ground-breaking proprietary global project and company valuation model for assessing the valuation of resources projects across a variety of minerals that takes into account a wide variety of input factors, not just basic reserves and resources measure.
Our model substantially outperforms commonly used valuation techniques in the sector. More importantly, it directly quantifies the impact of various factors on the value of resources projects, providing guidance to project developers in where their capital is best invested to maximise returns to shareholders.
Seeing through the weather:
Pottinger acted as financial advisor to two potential acquirors of Cubbie Station, the iconic Queensland cotton property. To inform our valuation analysis, we carried out a highly sophisticated analysis of the agricultural and weather risks affecting the property, based on over 100 years of weather data and the IQQM.
As a result, we were able to deliver new insight into the valuation of the property, risk mitigation opportunities and the optimal capital structure for a highly volatile asset. Our analysis provided direct recommendations as to how to optimise on-farm operations, as well as providing direct estimates of the credit risk of the property given a particular capital structure.