Foresight Group Flashcards

Question

Typical modelling assumptions and ball park figures?

Answer 1

We did a lot of model review work, as part of the corporate finance team we did a lot of audit support work where you are reviewing valuations, PPAs, Impairment testing (often a DCF), Valuations that Audit clients had done themselves or had had done by other advisors. Recently I did a valuation review of a collection of solar assets. Reviewing the DCF models for mechanical accuracy and the underlying inputs. So the key input was the electricity price path, where they followed forward prices for the first four years then estimated the LRMC to produce electricity, which was done by estimating the LRMC for each generation source and then estimating a generation mix for each year, we assessed reasonableness for these inputs and checked the accuracy of the calculation. We also did model reviews as an advisory engagement, mostly using our model review tool, which looks at the number of unique formulas in a model and you then check and comment on each unique formula.

Answer 2

Most of my work over the ~ 3 years I was the most junior person on everything I worked on, but towards the end there were projects that there was a graduate working under me as the analyst. NZRC valuation the second year I had a graduate working with me that I managed, delagating work - sections of analysis and specific slides in the report, also providing support where needed too.

Answer 3

* Built financial for a self-storage company in the property sector * Included 14 sites each of which had its own worksheet. Each site was modelled as a P&L down EBITDA and site-level fixed assets. * Each site is then consolidated at the group level, with the cashflow being done at group level too. * The model has development projects built in. Each project had a specific number of units and date at which it will come online. Functionality was built in to turn projects on/off, move the opening date and change the number of units. * Valuation methods include DCF per site and a direct capitalisation method. * DC method is based on assumption about stabilised occupancy and pricing and then an assumption on the cap rate. Any forecast capex is also PV’ed and subtracted. If not at stabilised occupancy rate at valuation date, then the difference between stabilised EBITDA and forecast EBITDA is PV’ed and subtracted until the date at which stabilised occupancy is reached. * DCF is standard DCF, with working capital only done at the group level and only included in HDO.

Answer 4

* Valuation model included a DCF, comparable company analysis and comparable transactions analysis. * DCF model was 10 years with functionality to switch between an exit multiple and a terminal growth rate for the terminal value calculation * Take Managements cashflow assumptions (do some due diligence and questions but we mainly want management to own these), apply working capital assumptions, our own WACC estimate and estimate terminal value using GG and exit multiple. Also applied normalisations to the terminal year as it was a BIL year. * Trading comps and transaction comps were mainly sports teams and other entertainment companies, focusing on companies that most of their revenue is contracted. - * Key difference in 2023 vs 2024 were that the forecasts given in 2023 were the same as those given to bidders. Silverlake then took these and added overlays to come up with their 3.5B EV value. We never saw these and so just based on the forecasts alone we were quite far off that. Used calibration to entry multiple as the primary method then 2024 had new forecast and relied more on the DCF.

Answer 5

* The group has 7 CGU’s that were each modelled separately and then consolidated at the group level. * The model was built to track and forecast carbon emissions, operating expenditure and capital expenditure from key emission sources. * This included motor vehicles, generators, heavy trucks as well as other head office related sources (business travel, work commuting, head office building emissions, etc). * Model outputs included group and CGU level dashboards - Main challenges being collecting / cleaning the data, not having any template of what the model should be as hadn't really been done before

Answer 6

* Lessor interest valuation model build for 21 land parcels including dairy farms, orchards and forests. * Model was a 50-year DCF model based on the contracted lease terms of each land parcel. * For the dairy farm and orchards assets, and the end of the lease period, a terminal value was calculated based on an assumed land value growth rate. * For the forestry assets at the conclusion of the lease period the forest would then be assumed to sell carbon credits that it had accumulated. This required a carbon price input which was a separate piece of modelling based on NZU forward prices, and an assumed carbon market international linkage in 2031 proxied by the carbon floor prices from the Dutch and Canadian emission trading schemes.

Answer 7

Hopefully having nailed down a role and a skill set and really developed some expertise in an area, I would love for it to be renewable energy and energy transition valuations. I'd also like to have developed mroe managerial skills and have become a great mentor to younger colleagues. ideally still in London I have my initial 3-year visa and then I hope to obtain sponsorship to stay

Answer 8

Communication I think is the biggest, every experience I've had being managed by seniors has hinged on how good a communicator they are, I like to know what is expected of me and when it is expected of me and so. Also how you do it is key, communicating in a way to encourage juniors to ask questions without feeling stupid and making yourself approachable. I always liked post meeting or discussions recieving written instructions in email form. Regular check ins but not over the top making juniors feel comfortable that you trust them I think helps, and over checking stresses people out, but obviously making sure progress is being made and offering opportunities for help or questions, so a good balance is key.

Answer 9

Strengths are that I am a problem solver I back my self to be able to figure most things out, I can work well independantly and in a group, I am hardworking and motivated but also easy going and easy to get on with. Weaknesses - I would say I am a good problem solver but sometimes because I know that I just assume I can figure everything out by myself when it would just been easier and more efficient to ask someone. Presentations are also something that I've never found easy and I really have to work at it, I'm not someone that can just chuck a couple slides together and let the words come to me, I need to be prepared and know what I am going say.

Answer 10

Sponsors: Financial investors (e.g., private equity and infrastructure funds) focused on returns and eventual exit, using LP-backed capital, prioritising IRR/MOIC over operational synergies. Corporates: Operating companies investing with their own balance sheet to achieve industrial or operational synergies, typically holding assets long-term with no exit requirement. Strategic Investors: Investors (including corporates and strategic sovereign wealth funds) driven by long‑term strategic objectives such as market position, technology access, or supply‑chain control, where strategic value outweighs pure financial return.

Foresight Group Flashcards

(37 cards)