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While greenfield dealflow has slowed, the sector remains an active element of many portfolios

Mandates Delivered: 243

With over 350 healthcare projects - with a capital value in excess of USD86bn - having been procured using project finance techniques, healthcare represents a major part of many funds' portfolio. As technology and clinical practice develop against a backdrop of wider demographic and social issues, we see existing healthcare contracts coming under pressure to vary.

In our experience, variation discussions reflect the current state of the authority-investor relationship. Where project knowledge is high and the contract actively managed, variations run smoothly. In their absence, variations can be fraught and a lens through which other contractual issues are expressed. Our approach help you navigate by simplifying an often complex landscape.

The relationship between education outcomes and building standards is evolving

Mandates Delivered: 219

As lifetime education and advances in technology widen the market, and self-funding becomes more prevalent, education providers understand the role of premises in influencing students' choice as well as their positive impact on learning.

Competition between providers and the growing role of 'student as consumer' has underpinned development of a healthy PPP student accommodation market, with varying degrees of financial support from academic institutions.

In the UK, removal of caps on student numbers has boosted growth and accommodation has emerged as a constraint. Whether Brexit will impact remains unclear, but in the meantime, investors remain attracted to this growing sector.

Justice & Emergency
What does the US Federal Government’s change of heart about withdrawing from using privately run prisons tell us about the direction of policy?

Mandates Delivered: 91

As one of the earliest sectors to embrace PPP as a means of substantially transferring risk to the private sector, the sector has however never shaken off the polarised views in which it is held. The reversal by President Trump of the previous administration’s attempt to scale back the use of privately run prisons is one example. A continuing influence over the last decade has been falling crime rates but high levels of incarceration.

With England and Wales reverting in 2020 to an in-house model for all probation of offenders, investor interest may be limited to improving the efficiency of the public estate.

Housing, Civic &
As sustained low interest rates and capital inflows keep housing unaffordable for many, new approaches are finding favour.

Mandates Delivered: 158

Our wide-ranging experience across housing and civic development projects emphasizes the importance of understanding cashflow phasing as well as standard property appraisal techniques - such as yield and NPV analysis.

Developments requiring network investment, such as low-carbon energy infrastructure, can be particularly vulnerable to project delays.

Strong use of modelling and a willingness to look at how to downside risks can be shared among project stakeholders can, however, ensure well-structured projects succeed.

Project TSY

Amberside were mandated to provide corporate finance advice over the acquisition of equity and subordinated debt of 6 UK LIFT PPP infrastructure assets, comprising 15 highly geared SPVs and 14 holding companies. This also required acting for the infrastructure fund, which was successful in acquiring the assets following competitive tender. The value of the transaction was £253m. Each SPV was individually geared with two tranches of senior debt. The projects were particularly unusual for PPP transactions, with £68m of debt secured against residual value of the assets and contracts with third parties being arranged at holding company levels rather that at the operating SPV.

At commencement, we undertook a scoping exercise to fully understand the range of skills required and the risks involved in the project We developed a project plan from known deadlines and discussed this with the bidding client. Given the short time frame, for every element of the plan, a contingency was made should any member of the team become unavailable at any moment.

Amberside acted as lead corporate finance adviser to the acquirer, undertaking full financial due diligence of the transaction. Financial models were created for each of the 15 operating SPVs. An aggregation model was produced, which loaded in the results from each individual company and had the ability to run (via excel macros) sensitivities in each of the underlying models and reporting the results. All relevant financial documents were analysed, together with management accounts, bank statements and board papers.

Our experience of PPP LIFT infrastructure assets helped the team to quickly hone in on the key areas of the contract documents and spot key operating risks arising from reviewing board meeting minutes. Using our modelling and negotiating experience, as well as our knowledge of the asset class, we were able to ensure that the optimum price was proposed, without "subject to" conditions. This was fundamental to winning the bid, due to the nature of the open market competition attracting over 50 bidders.

Bangor & Nendrum

Pario, a long-term client of Amberside, required advice on the adoption of FRS102 accounting in a UK education PPP project.

Amberside utilised the existing operational model in order to undertake the accounting conversion, thus limiting the changes requiring acceptance, easing the funder approval process and reducing audit costs for the client. We worked alongside the SPV manager to ensure that the accounting assumptions made were both appropriate and optimal in terms of maximising shareholder returns. This was especially important given that the composite trader status of the company meant we had to carefully consider the tax impact of any adjustment to retained earnings made upon the adoption of the new accounting approach.

By thoroughly reviewing the existing operational model during the planning process, we were able to make adjustments which were consistent with the approach of the original model builders, and ensured that the future model update process was not complicated by our amendments.

This model has been accepted by the model auditors, and the project funders have approved the resulting distribution.

"Amberside have provided a range of services to us over a number of years, and their user-focussed approach has always resulted in an easy to use and reliable product. Their knowledge of changes relevant to the industry, relating to both accounting policy and the wider legislative environment, has allowed us to secure funder approval to release large distributions from these projects. The support provided during the auditor and funder approval process has been particularly valuable in helping to manage relationships with our project's key stakeholders." – Darren Barclay – Finance Director – Pario


Sodexo originally approached us to develop an updated operational model for the HMP Forest Bank project. As a part of our mandate, Amberside was engaged to analyse the accounting policies inherent to the project in order to determine their efficiency. The project forecasts indicated that cash would remain trapped within the project and was not distributable due to profit restrictions.

Upon material completion of the model build, we analysed the best methods to extract the cash 'trapped' in the project through accounting policy changes and the introduction of an upstream loan. Amberside provided the client with a detailed report aimed at executive-level decision-making. A model was developed to allow the client to make an informed decision with the precise level of detail required, with functionality that could display any of the presented options at the change of a switch.

"Amberside were responsive and diligent throughout the process, providing us with the correct level of detail to make the correct decision." – Jonathan Cowdell, FD, Sodexo Investment Services Ltd

Partners for Improvement

Partners for Improvement in Islington, a PFI contract including a long-standing client, approached us initially to redevelop their existing operational models. The mandate included an examination of the historic accounting entries and cash flows for the projects in order to determine whether the projects were better served retaining their existing accounting policies and practices, under 35.10 (i) of FRS102, or taking advantage of the opportunity presented by the new standard to change policies and perform a historic restatement.

The presentation of this to the SPC led to an extension of the exercise, in which we reviewed the projects to understand where the SPC could enhance value or produce cost savings that might be passed on. This included indicative work on the position of the project were it to be refinanced, as well as analysis of the reserving structure and the general level of the cash flows across the projects. The work was presented to the board in order to aid them in understanding the decisions they might be able to make and guide their thought process. During this process the Authority submitted a proposal to the Board for their consideration, and we have been helping the board to understand the benefits and ramifications of this proposal.

"Amberside have proved invaluable in better understanding the underlying financial structure of our projects and helping us to understand the benefits of the options presented to us. The clarity of their work in analysing the project statements has provided great aid to our decision-making process" – Sharon Pearce, Managing Director, Partners for Improvement in Islington

Amberside Advisors Ltd
Paul Austin FCA, Philip Rhoden FCA, Neil Rutledge FCA, David Scrivens FCA, Richard Turner
Registered Office:
Clubfinance House, 64-66 Queensway, Hemel Hempstead, Hertfordshire, HP2 5HA
Registered in England. Registered Number: 06078852