Risk-mitigated, long-term returns | $20.35tn funds available
The opaque and fragmented project finance market has been unlocked with the opening of the Project Finance Exchange (PFX), now enabling seamless access to a growing reserve of quality controlled, risk-mitigated alternative and private capital investment opportunities providing long-term returns for fund managers. Over the past ten to 15 years project finance has ceased to be the exclusive domain of $mega-million/billion major construction and infrastructure projects and now reaches across all deal values and market sectors worldwide. But the massive and continuing growth of the market has generated thousands of fund managers, with as many thousands of projects seeking finance at any one time. The resulting fragmentation has led to only a fraction of projects ever connecting and engaging with a fund. To overcome this market weakness The Project Finance Exchange (PFX) is being opened to unlock the market and enable projects and funds to connect and engage seamlessly. Financiers and fund managers enjoy far greater risk-mitigation and long-term returns and many companies seeking finance through traditional asset-finance could well find that the challenge is far easier if they structure their proposal for project financing. (Editors: examples given in ‘Editors’ below)
The direct/alternative investment market is powered by $74 trillion of private capital owned by 19 million U/HNWI’s, of which 27.5%, or $20.35tn is allocated to real estate and alternative investments (Source: Cap-Gemini World Wealth Report 2020). This vast resource of private capital, or ‘dry powder’, is managed by asset managers, hedge, private equity/debt and alternative investment funds worldwide. It is constantly seeking out private debt and equity investment opportunities that, as far as possible, match the risk-mitigation and long-term returns of the mainstream markets.
PFX Chairman, David Rose explained: “Over the past decade project finance has evolved, but what defines it remains at the core of today’s structure. Specifically, project finance is predicated on the track record and financial stability of whoever is contracted to buy the output from the built project and not on forecasts in a business plan. In many ways, it can be likened to REIT investments, but with a far greater range of opportunities and a degree of risk-mitigation and long-term returns that no other form of alternative or private capital investment can match.”
Project finance now reaches across deal values from $10m to $5bn+ and all market sectors worldwide. In advance of the PFX official March 1st opening projects already listed on PFX range across a renewable energy project in Australia ($12m) thru cement manufacturing in Nigeria ($140m) to a $335m mixed-use RE development in Miami. A further 100+ deals are currently working their way through PFX quality controls before listing. Registered financiers so far have funds available of $10.9bn.
Quality control
PFX fintech is built around established market conventions. PFX operates through a global infrastructure of Regional Managers, seasoned and experienced project finance intermediaries who review all submissions before listing to ensure they meet the requirements of any fund manager. This eliminates the expensive and time-consuming efforts currently spent on deal origination for financiers.
Fund Managers
Hedge funds, alternative investment funds, private debt/equity funds and other private capital fund managers register and set their preferences. They receive elevator pitches matching those preferences, from which they can move onto the executive summary. If still interested they can offer to engage with the project. This notifies the Regional Manager handling the case who can discuss the opportunity in further detail with them. Further information in the ‘Financier’ zone at the PFX site.
Raising Finance
CEO’s, CFO’s and business leaders seeking financing for their projects can find a Regional Manager in the Submit Project zone at the PFX site and complete a short intake form. The Regional Manager ensures that the project is submission-/shovel-ready before listing. Properly structured project finance leaves project principals be they individual, corporate or government free and clear of any personal or corporate liability. Many companies currently seeking traditional asset-backed financing could well qualify for project finance. For examples please see ‘Editors’ below.
PFX claims to be different to all other ‘investment platforms’ and ‘listing services’ in that it understands each financing structure has its own unique characteristics. PFX is set up exclusively for project finance and its ‘contracted off-take’ requirement. It cannot handle M&A, VC, Mezz or any other financing structure. Many project financings can be described as ‘sustainable’ or ‘impact’ investments. A Project Finance course suitable for private capital and alternative fund managers is also presented at the PFX site.
Further information: www.projectfinanceexchange.com