Mercer’s PTO practice provides expertise and experience to Sovereign Wealth Funds (SWFs), corporate holdings and family businesses. We support them by bringing clarity and action-oriented change in managing their portfolios.

Why introducing the PTO services?

  • The Middle East counts a number of investment organizations with a diversity of portfolios. On one hand, you have the SWFs, which have a diversified portfolio of assets managed directly and indirectly. On the other hand, you have the corporate holdings and family businesses, which manage large portfolios of direct investments.
  • The Middle East has experienced changes in its business environment in the recent years due to low oil prices, the introduction of the VAT and Covid-19 to name a few. These changes have impacted the portfolio of investors in the region. How do they protect value and ensure growth in their portfolio?
  • Mercer’s PTO practice provides expertise and experience to investors by bringing clarity and action-oriented change in managing their portfolios.

 

The PTO practice provides clarity and action-oriented change

Our services and comprehensive expertise benefit investors in three different ways.

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Sovereign Wealth Funds and Supra Nationals

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Corporate Holdings and Groups

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Family Holdings

Bring financial & investment discipline into the investment firm

  • Protect value, mitigate risks
  • Define priorities for portfolio
  • Provide clarity on capital budgeting
  • Identify areas of cost savings
  • Better understand the cost of funding and return by asset (after properly allocating debt)
  • Capture revenue / loss

Accelerate transformation of direct investments portfolio

  • Initiate and track critical high impact initiatives for select portfolio companies (disposal, investment, etc.)
  • Enhance decision making at Investment Committee (IC)
  • Enhance corporate governance agenda (shareholders rights, Board members, etc.)
  • Run Project Management Office (PMO) to track the delivery / implementation of all initiatives
  • Run cash flow analysis to track liquidity needs in portfolio
  • Ensure sustainable growth

Adopt best practice into the Client’s organization

  • Professionalize and institutionalize the Client’s organization
  • Provide well-structured framework for communication with all stakeholders
  • Ensure consistency and clarity with use of standard templates for Investment Committee memos
  • Share Intellectual Capital to assist in skills transfer with investment team
  • Bring global experience of tried and tested solutions, clear understanding of unique local influences
  • Define risk framework and debt allocation policies

The PTO practice builds on five main service offerings

Our PTO professionals bring a blend of private equity and consulting skills to perform the activities under each service offering.

    Service Offerings

   Typical Activities

1

Performance Improvement and Portfolio Transformation

  • Typical private equity activities undertaken at a holding company level:
    • High level review of strategic and financial position of a portfolio company
    • Support to value creation initiatives in a portfolio company
    • Review of corporate governance of portfolio company
    • Project Management Office (PMO) for the transformation of a portfolio company
    • Support extended to Directors sitting on the Board of the portfolio company
    • Coordination of advisors for monetization and exit

2

Investment Management Advisory

  • Review and advice on governance framework
  • Review and advice on organization and operating model of investment firm
  • Review / Development of detailed investment procedures

3

Capital Strategy and Planning

  • Development of financing strategy – Linkage to Strategic Asset Allocation (SAA) work
  • Capital planning - Linkage to SAA work
  • Review of balance sheet and suggestion for improvement
  • Review of direct investments valuation

4

Investment Strategy and New Opportunity Assessment

  • Activities which extend the typical SAA work:
    • Development and adoption of ad hoc methodology for more detailed SAA (for geographies below Mercer regions)
    • Review of Client’s portfolio (more focused on direct investments) and suggestions for diversification by considering various dimensions including sectors

5

Customized Support

  • Identification and placement of Affiliate (“Secondee”) for specific role requested by a Client (e.g. Senior Risk Advisor; Acting COO; Investment Professional)

 

Typical operating model for performance improvement and portfolio transformation

We partner alongside your team to deliver results

Chief Investment Officer / Investment Committee / CEO / Board of Directors

 

 

Client’s Investment Team

 

 

 

 

 

Mercer Portfolio Transformation and Optimization

 

                                                            

 

Portfolio

Direct Investments

Real estate / property / land assets

Greenfield projects

 

What are the typical engagement models by Client type?

Sovereign Wealth Funds have large portfolios of direct investments. They are keen to understand how they can better manage these assets. By working collaboratively with the existing investment teams “shoulder-to-shoulder”, we can make a faster impact and we can embed best practice seamlessly into the organization. They learn by working with us – we support the Directors representing them on the Board of investee companies, provide the analysis to make informed decisions, prepare the Investment Committee memos, etc. 

 

With corporate holdings and family businesses, we are typically embedded in their investment teams and we work directly with the Chief Investment Officer or the Head of Investments. After an initial diagnostics phase which consists of understanding the portfolio, its strengths and challenges, we discuss with the Client the set of potential initiatives which can improve the performance and the resilience of the portfolio. We discuss all topics: portfolio characteristics, corporate governance (Boards and Management Teams), potential transformation initiatives, etc. Once agreed with the Client, we support with the implementation of such initiatives.

 

Why Mercer’s PTO practice?

 

Our team consists of experienced professionals who have been part of investment organizations before. We are familiar with the challenges faced by our Clients and our Clients appreciate this differentiating factor.

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