An investment manager with a long track record of investing in infrastructure projects was looking to make its first investment in non-regulated retail energy sector – specifically investing in a business deploying connected home technology that would lower costs for homeowners and help achieve a low-carbon future.
The key question
The investment manager’s key question was: “Does this investment make sense?”.
Answering this question involved assessing many factors, including:
- Confirming the market opportunity and size
- Developing an assessment of the competitive landscape
- Providing confidence that the business model is sound and an assessment of current competitive advantage
- Validating homeowners’ savings potential in terms of energy and finances
- Assuring that data from existing installations confirmed the validity of potential savings
- Validating capital and operation cost assumptions
- Providing an understanding of the retail energy market, consumer bills, and policy & regulatory drivers
As part of the project, we also provided educational materials for the investment committee to help them make informed decisions in an area that was new to them.
What was needed
- Insights and analysis regarding the investment target’s business opportunity, ability to maintain a competitive advantage, and assurance of the energy and financial savings that homeowners should expect.
- A clear rationale to support our analysis and views.
- Clarity in our presentation of results and support to the investor to understand this new market sector.
As required by the investment manager’s requirement we undertook this due diligence project in tight timescales, working collaboratively with the investment manager and the investment target’s senior management team.
We used our deep understanding of low carbon technologies and the retail energy market to provide the assurance necessary for the investor.
We provided a comprehensive report for the investor that addressed the questions raised at the project outset, and worked with the investor to address queries that arose as they learned more about the market and low carbon technologies.
The LCP Delta difference
Our expert knowledge of the market, and experience, dedication, and passion of our consultants allowed us to quickly allay the client’s concerns – giving the client confidence in its investment activity.
Our impartiality and professionalism has already helped us to provide further support to the investor and we look forward to developing a lasting relationship that will help to accelerate investment in the low carbon transition.