As a long term follower of infrastructure and utilities the area of politics interests, worries and excites me. Often all three on a daily basis.
As an asset manager however, I'm sure most of the time reality would best be served by viewing politics a bit like the weather - of significant interest as it affects you, but well beyond any direct control, often unpredictable and something to be reacted to or avoided wherever possible*.
It's unsurprising then that, whilst most asset managers have a view on the issue of asset ownership, it is very rarely discussed openly or in any structured debate. Whether this is because it is so closely aligned to politics, or that you might as well talk about the weather for all the good that will come of it.
So let's start from a 'safe' place; the assets, and see how far we can get.
We already know that the type of Asset Ownership is important to asset management;
- The type of asset ownership affects the organisational objectives. For example - profit efficiency, regulation, the environment, the market, access to capital, the RAV. Think about the statement 'Outperforming the determination.' (UK Regulation)
- The type of ownership affects the organisational culture. Step into an organisation that is public or private and you will normally feel a difference in culture. If you've worked in both, you'll know this.
- The 'tenure' of the asset. Just consider the effects of having 'hand-back condition' in terms of decision-making for a 25 year PPP/P3 for example.
And yet, in terms of the asset management community, we tend to see these things as being 'upstream'. We know how to deal with each model very well, but don't often make the jump into suggesting which models should be used, or get this chance.
So can we agree;
- Different ownership structures suit different asset types, objectives and even situations. What works for a new toll motorway might not work for the 100 year old rail system next door.
This point has the potential to allow this subject to be tackled 'sans politics', to be detoxified.
So how about some work on what ownership types suit what situations in terms of promoting and supporting optimum asset management? (Please post these if you have them already!)
If we come out with some useful conclusions on this then maybe the politicians might get on board. Or maybe it might rain today... what do you think?
*I'm writing this in the UK