By Rich Webster | July 6, 2021
For the last 6 months I have been enjoying ‘getting my hands dirty’ on modelling and advisory projects with Pivotal180.
Founded by Haydn Palliser, Daniel Gross and Alison Leckie in New York, Pivotal180 offers advisory and financial modelling services across the infrastructure universe, with a particular focus on coaching and mentorship of professionals working in climate change, sustainable finance, or renewable energy. After working daily with co-founder Haydn Palliser, the below are my insights into the strengths of their financial modelling service offering.
Training
Having prepared and delivered dozens of courses across North America, Europe, and Asia myself, I have a good understanding of the difficulty and effort required to not only create high-quality content for the full duration of a training course but to match this with quality in delivery. I have been impressed with both the content and delivery platform across the range of Pivotal180’s financial modelling training courses.
Let’s be honest, focusing for more than a few hours on Excel training material is a tough ask for many people and I have enjoyed seeing Pivotal180’s desire to create an effective learning environment. Each public course can be accessed as a purely online course should the participant desire greater flexibility to study and practice as their time allows, whilst the ‘live’ courses are taught over multiple sessions, over different days or even weeks, with homework to complete in-between classes, providing time for concepts to be practiced and helping to keep the classroom motivated for each session.
The material covered draws on both Haydn’s and Daniel’s significant experience advising and modelling a vast number of infrastructure transactions, with material venturing beyond the financial model. Material varies from transaction process and documentation, through to tax regulations (more later) and demonstrates detailed technical understanding such as how generation estimation occurs for a wind farm model (as part of the renewables course).
Tailored and usable solutions
Execution based on experience extends to consulting assignments and Pivotal180’s customization of solutions. I used to talk a lot to junior modelers or course participants about the futility of creating a great financial model if the model owner is unable to use it or interpret the results. Two points that stand out for me here is usability of the model itself, and delivery of the model and its message.
Pivotal180’s financial models focus on usability for the end user. While this is a generally over-used phrase, a key demonstration of this can be shown by the fact that the base case of each model typically requires no macros to be solved. I will not talk through macro concepts in detail here, but it is generally accepted by the industry that a typical project finance transaction model will include sections where known circularities occur. A common way to resolve these circularities, particularly for a tired or time-constrained analyst, is to use an automated copy paste macro (a pre-specified order of commands that can be controlled by the click of a button), which works around this circular logic and means that the user can still obtain meaningful outputs from a model. The disadvantage is that operating the model becomes more rigid and complicated, and it is likely this macro will need to be re-run each time a key input is changed, causing analysis of different scenarios and key sensitivities to take longer via a potentially more confusing process. Crucially, I am not suggesting that macros should never be included in models, however understanding when an alternate solution may provide an acceptable degree of accuracy and increases usability, shows a true comprehension of financial, technical, and modelling concepts, as well as an understanding of the use-case for the client, that can only be obtained with experience.
This usability is key, but as suggested earlier, is even more powerful for the client if coupled with the correct delivery. I was particularly impressed on a recent project where, for each iteration of the transaction, Pivotal180 delivered a thorough presentation on not only the latest model updates but more importantly directed the client to key return changes, pinpointing the most sensitive inputs and directing the client to ranges of input values that required further analysis, once again showcasing the benefit of advisory experience for a modelling assignment.
Navigating complex concepts
Assisting clients with understanding and interpreting the models becomes even more relevant when modelling a complex regulatory environment. I consider myself a specialist for modelling renewable energy projects in Australia but having to model key regulations or contracts for a new jurisdiction such as the US has taken me out of my comfort zone personally, which I have enjoyed immensely. One of the main areas of difference relates to tax, and most specifically to a strategy known as ‘tax equity’ – an extremely important and complex area in the US renewable energy market that may not mean too much to those based elsewhere but has undoubtedly caused thousands of analysts over the pond endless sleepless nights. Initially learning via the online Tax Equity course on the Pivotal180 platform, I have been using the core tax equity mechanics built by Haydn and have once again seen firsthand the team’s ability to model and present an incredibly complex and misunderstood area with clarity, once more combining a deep understanding of the required technical and modelling concepts to create a practical client tool.
Please use links below to find out more about our financial modeling courses and to experience the Pivotal180 difference.
