Investors in carbon offset projects face complex transactions that involve high degrees of risk and uncertainty. Point Carbon, the leading advisory firm on global carbon markets, helps investors identify and manage carbon-related risks. Using proprietary methodologies for risk assessment, valuation and pricing of carbon assets, we provide robust quantitative and qualitative analysis that goes straight to the point.

Portfolio Valuation

In a volatile market, accurate and objective portfolio valuation is essential for carbon portfolio managers. Using our award winning CDM and JI portfolio valuation methodology, Point Carbon Advisory delivers objective valuations alongside customised expert advice on critical portfolio risks and risk mitigation strategies. 

Example analysis:
• Quantification of exposure to methodology, registration, delay and issuance risks
• Risk and exposure assessment for project types, technologies and methodologies in CDM and JI
• Use of proprietary long-term carbon model for post 2012 valuation
• Probability distributions of CER/ERU delivery for projects and portfolios 

Portfolio valuation is also performed for auditing support and risk management processes.

Corporate Valuation

Corporate Mergers and Acquisitions have become a common feature of the carbon market as the market has grown in scale and maturity. Private equity firms and fund managers often struggle to find reliable, appropriate methods for valuing companies with large carbon assets. 

Point Carbon Advisory Services has the data and tools to meet this challenge. We have been working closely with numerous investment firms to help them assess the value of companies active in the carbon market. 

Corporate valuations concentrate on the size, structure and success in the management of carbon credit portfolios. We also examine the competitiveness of the target company’s business model, benchmarked against other companies in the sector. We focus on long term prospects, i.e. long term profitability and generate a range of valuation metrics including Valuation Ratios, Per Share Data, Profitability Ratios, Management Effectiveness and Financial Strength indicators.

Valuation of portfolio of CER contracts
Identifying and quantifying volumetric risk factors, establishing a long-term credit price curve and calculating the asset value of the portfolio of CER contracts based on principles of fair value. The project was commissioned by a European CDM project developer. 

Quarterly valuations for a carbon fund
Point Carbon is providing quarterly updates of the value of the fund’s investments in primary CDM and JI projects, with a breakdown of different empirical risk factors on the portfolio’s value. The empirical risk factors were determined using Point Carbon’s proprietary Carbon Valuation Tool. The project was commissioned by a European fund/hedge fund. 

JI Portfolio Valuation
The project consisted of valuation of a JI portfolio for a project developer as part of a transaction process. The portfolio was eventually sold. The project was commissioned by a European CDM project developer. 

Monthly portfolio valuation
Valuation of JI portfolio for alternative investment firm: Point Carbon conducted an empirical valuation of a portfolio of JI projects. The project was commissioned by a European private equity firm. 

Valuation of major project developer
As part of a due diligence process, this project was a valuation of major CDM & JI project developer with a portfolio of more than 100 projects. Point Carbon built a valuation model to assess the total value of the project developer, including a number of price scenarios for EU ETS and post 2012 policy scenarios. The project was commissioned by a US private equity firm. 

Valuation of project aggregator for potential acquisition
The project consisted of conducting an external valuation of a large aggregator of CDM projects as a potential acquisition target for private equity investor. The portfolio consisted of more than 150 VER, CDM and JI projects. Project was commissioned by a US private equity firm. 

External review of government CDM/JI portfolio
This project consisted of three parts. Part one consisted of a desk review of 15 CDM & JI projects that the client was about to invest in. The review comprised ratings and an empirical assessment of delivery potential within the Kyoto period. Part two consisted of a secondary CER market outlook to 2013, also looking at how the secondary market is traded, and what CERs are exchanged. Finally, part 3 comprised evaluating a large portfolio of Kyoto period CER/ERUs. The valuation was based on Point Carbon’s empirical framework and some expert judgement. The client was a European government.