Independent valuations for DB-pension scheme stakeholders

We perform valuation analysis in support of covenant assessments, either on a stand-alone basis, or as a supplement to more traditional “traffic light” covenant assessments.

A discounted cash flow (DCF) approach:

• provides a quantitative assessment to supplement more qualitative covenant methodologies
• can model medium to longer term macroeconomic, market, and employer specific cash flow assumptions
• directly shows the impact of different forecast scenarios and sensitivities
• can be measured consistently over time, and thresholds in relation to deficit measures can easily be set to trigger particular courses of mitigating action.

The IR test is a three-stage valuation test. It assesses whether the employer is under-resourced, and then if there are other associated entities in its group whose resources, when combined with the employer’s, are sufficient to support the scheme.

We can work closely with schemes, the Pensions Regulator and their respective legal advisers to:

• interpret the relevant legislation from a valuation perspective
• perform the IR test
• draft an expert valuation report.

We can support employers or schemes, using our specialist knowledge to quickly assess whether an employer is insufficiently resourced.

Asset-backed funding has many advantages for both schemes and employers. However, once outside the realm of the more typical property assets, the collateral can be challenging to value and requires expert assessment.

This is how we can support employers:

• Assess the feasibility of different asset types, including intellectual property and other intangibles
• Run preliminary valuation assessments
• Perform valuations for PPF levy-purposes
• Independent valuation of the scheme asset/collateral at inception and on a periodic basis for financial reporting
• Test the sensitivity of the valuation to different distress scenarios
• Advise on the practical aspects of realising value in an insolvency situation

Our market leading infrastructure valuations team brings a wealth of experience in global valuations of infrastructure assets and portfolios. We provide independent valuations for transactional and financial reporting purposes to a wide variety of private equity and infrastructure funds, institutional investors, corporates, sovereign wealth funds, and pension schemes.

Transactional valuations

Valuing projects and portfolios of listed and private equity and debt investments across the renewable energy sector to assist investment committees.

Model reviews

Supporting deals by reviewing deal models for financial close.

Fairness opinions

Public prospectus fairness opinions in relation to seed-asset portfolios for IPOs.

Model build

Creating models and building sensitivities at asset level and at fund/portfolio level.

Process automation

Using VBA to automate repetitive manual tasks and improve process efficiency.

Interactive dashboard tool to present key performance data from portfolio models to aid periodic reporting.

Model updates

Outsourced model updates from asset-level to fund-level to free up transaction teams around reporting periods.

Periodic valuations

Independent asset and portfolio periodic valuation reports or letters as an independent valuer endorsing defensible outputs for your audit processes.