Financial asset management – in-house or outsourced?


When it comes to renewable asset management, owners and investors typically hire specialist third-party companies to manage aspects such as operational performance, HSE compliance, monitoring and optimization. Outsourcing these activities to an organization with a large team of analysts and engineers ensures that renewable energy projects deliver optimal performance and return on investment (ROI). As our clients’ portfolios continue to grow, we are also seeing a move towards outsourcing the financial part of asset management.

Financial Asset Management focuses on the end-to-end management, administration and financial compliance of the portfolio, whether regulatory, statutory, legal, tax or contractual compliance. Sometimes financial asset management can be seen as just an accounting service. However, it is much more than that and its importance should not be underestimated. Overseeing everything from financial data management and lender management to budgeting, cash management and distributions, a good partner can provide you with in-depth financial analysis of your operations and, in turn, help make better business decisions.

The top three reasons to outsource financial asset management are scaling, reducing operational costs, and accessing qualified experts without putting too much pressure on budgets. One of the biggest challenges facing asset owners and investors is ensuring that with an increasing number of assets to manage, all regulatory and financial compliance requirements are met and that cash flows cash are monitored to maximize return on investment. With the growth of portfolios comes increasing demands on finance, accounting and compliance. Scaling the portfolio requires additional investment in resources, while outsourcing is generally less expensive, meaning more investment can be allocated to fund growth. This creates significant additional revenue for asset owners and enables faster and more efficient portfolio scaling. On the other hand, outsourcing could be seen as entailing some loss of control. The key is to find a trusted partner who offers a comprehensive service covering all renewable technologies.

Within RES, we have a large team of specialists ranging from tax and management accountants to administrators, who currently handle over 150 projects for clients across the life cycle of wind, solar and storage projects. of energy. With multiple reporting lines and project boards, to ensure strong governance, quality standards and segregation of duties, their experience and skills ensure clients have the right information to make good business decisions to help the growth of the relevant funds. For example, for one of our clients, we ran the portfolio-wide commercial rate review process, resulting in projects saving over £750,000 net.

Whether the financial aspects are managed internally or externally, there is a plethora of software systems on the market to help efficiently manage the volume of data extracted from different sources. These often have built-in control and compliance functionality and are useful when managing large portfolios of SPVs across different geographies and technologies. The combination of software and financial asset management specialists provides a holistic view that helps plan for the future while ensuring compliance and maximum return on investment.

To conclude, the most important thing to consider when making the decision to in-house or outsource is the size and growth ambition of the portfolio and funds. Ultimately, a trusted partner enables investors and asset owners to grow quickly without taking on additional risk and administrative burdens, while reducing operational costs and maximizing investment income.


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