Understand and minimise
All investments in challenging operating environments are conditioned by their risk profile. Some of these risks are exogenous to projects, requiring investors to acquire a detailed understanding of contextual circumstances in order to anticipate and to prepare. In other cases, however, projects have direct influence over their ultimate risk profile – for good and bad.
While there is a temptation to simply discount expected returns from investments in riskier jurisdictions, blunt financial tools tend to look at these operating circumstances as a static and uninfluenceable variable. In reality, social and political risk profiles can be mitigated or exacerbated by the way in which companies design their investments and position themselves.
Investments are conditioned
by their political and social
We have developed a meticulous approach to assessing and mitigating sovereign risk that is highly regarded within the industry. We analyse the interaction between the key features of and investment and its operating environment. We then develop a multi-layered categorisation of potential risk events and their drivers; we assess the timing, likelihood, and consequence of each; and we quantify the ultimate amount of project value at risk.
Based on the resulting recognition of project-specific risk profiles, we devise a targeted portfolio of preventative measures, programmes, and project adaptations to reduce the magnitude and to manipulate the timing of potential risk events.
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