RT Journal Article SR Electronic T1 Strategies to Mitigate Risk and Improve Investment
Return in Large Capital Projects JF The Journal of Private Equity FD Institutional Investor Journals SP 16 OP 23 DO 10.3905/jpe.2011.14.3.016 VO 14 IS 3 A1 Kenneth M. Roberts A1 Amanda L. Schermer YR 2011 UL https://pm-research.com/content/14/3/16.abstract AB Private equity investment opportunities in the energy industry are increasing as a result of the volume of large capital improvement projects and recent regulatory changes. While large capital improvement projects provide an opportunity for a potentially profitable investment, the return on that investment must be protected through the active management of the inherent risks. Owners have traditionally attempted to mitigate financial risk solely by contractual risk transfer. The article explains why the paradigm of attempting to shift the risk via the contract alone fails to adequately protect the owner from financial risks and that active owner involvement and use of industry standard project controls for schedule, procurement, and claims management are the best strategies to mitigate risk and improve the rate of return on any investment in large capital projects.TOPICS: Private equity, other real assets, risk management, project finance