Asset Management | Public Private Partnerships and Offshore Transmission Owners

Public Private Partnership (“PPP”) and Offshore Transmission Owners (“OFTOs”) investment structures involve investing in a Special Purpose Vehicle (“SPV”) established to provide and maintain an infrastructure asset over a period of 25 years or more. These SPVs typically have no employees and their operation and management is provided by an Asset Management Provider (“AMP”) under an Asset Management Agreement (“AMA”).

The AMP provide the full suite of services associated with the day-to-day operation of an SPV including:

1. Contract Management Services – Ensuring the SPV is compliant with all contracts and applicable laws and regulations
2. Financial Management Services – The provision of a finance function including accounts payable, accounts receivable, budgeting and forecasting
3. Company Secretarial Services – Ensuring compliance with applicable company laws and the administration of all SPV corporate affairs

The delivery of these services requires high levels of engagement and coordination with the public sector counterparties who procure these projects through the PPP and OFTO contracts, regular asset visits, and reporting on asset performance to all stakeholders.

The AMP perform a critical service and are integral to the successful delivery of PPP and OFTO schemes. They act as the SPV’s (and by extension the investor’s) representative and lead on the day-to-day engagement with public sector clients. Therefore, it is essential that their approach to asset management and their culture are aligned with those of the investor and any investment adviser.

In the PPP and OFTO market, investment advisers such as Amber will either use a third party, independent organisation to provide the AMA services, or a company that is part of the investment adviser’s group. The latter approach has been adopted by Amber since its inception, and it is the dominant delivery model in the sector.

In this paper we:

1. Describe the PPP and OFTO contractual framework
2. Describe the role of the AMP and the services they provide
3. Outline Amber’s approach to asset management and the delivery of AMA services
4. Present the benefits of Amber’s approach
5. Provide Case Studies supporting the delivery of the benefits in respect of the INPP portfolio
6. Outline how the potential conflicts of a related party MSP model are managed
7. Present the average costs for the services

Disclaimer

This report and the information contained herein is the proprietary information of Amber Infrastructure Limited (“Amber”). It may not be distributed, published, reproduced (in whole or in part) by any medium or in any form, or disclosed or made available by recipients, to any other person or used for any other purpose, without prior written permission from Amber. The information contained in this document is provided for general information only and should not be construed as a solicitation, offer, invitation, inducement or recommendation. The case studies used within and any reference to International Public Partnerships Ltd (“INPP”) is for illustrative purposes only to demonstrate the capabilities, skills and experience of Amber and its affiliates and is not a personal recommendation to invest in, buy or sell any fund, security or investment company nor to adopt any particular investment strategy. No warranty or guarantee is given by Amber nor may any reliance be placed on any returns or other performance indicators or targets which may be used or referenced in this presentation. Any views and opinions expressed are those of Amber unless otherwise stated. Information, statistics, and data within this document is subject to change without notice and should not be acted or relied upon by any person without obtaining specific and relevant legal, tax, securities or investment advice.