Assessment and monitoring of risks across an extractives portfolio
The situation
A private equity firm with an expanding portfolio of assets in the extractives sector across multiple regions was seeking to apply greater consistency in various areas: the evaluation and integration of new assets, risk benchmarking, and ongoing risk monitoring.
Our approach
We undertook an assessment of the firm and found that their existing feed of country risk data covered key risk factors broadly but was not sufficiently tailored at the asset level. The firm’s increasing number of assets and need to monitor on an on-going basis would require automation to pull data, though relevance to and impact on the portfolio would still call for expert assessment.
The outcome
Through our support, the firm is now running a focused portfolio monitoring approach that combines the best of current automated data capture with expert country analysis inputs. This has allowed the firm to consistently identify “red flags” earlier in the acquisition process and focus its diligence activities on the most notable risks to each new asset at an earlier stage.
