Physical Assets, Portfolios & Hedges

What is it worth and how do you hedge it? Whether you are bidding on a portfolio, investing in a trading company, or financing projects, this question can be challenging to answer with confidence. The number of positions in a portfolio can be extremely challenging, or parts of the portfolio can be illiquid and complex — or both. It pays to have some high quality analytics backing your decisions and your pricing.

Scoville provides independent third-party valuation of commodities portfolios for trading books and for a broad array of physical assets, including generation, transport, storage and reserves. Using multiple pricing sources, Scoville maintains up-to-date market data for valuation across a broad geographic and commodities footprint. Once we have the data defining the portfolio, the due diligence commences with reliable methodology and transparent results regardless of portfolio size or complexity. Post-transaction valuation and performance analytics is also available.

Scoville also offers a formalized hedge rating program. Structured hedges are an inherent component of project finance. Well-designed hedges ensure project performance and successful debt repayment. On the flip-side, badly designed hedges can result in inferior financial performance and ultimately project collapse.

Scoville’s hedge rating program quantifies the future performance of structured hedges with a fully probabilistic analysis of future cash flows of both the underlying physical asset and the hedge. By examining a set of plausible scenarios, we identify potential weaknesses, codify hedge quality in a numerical rating and make suggestions as to potential structural improvements to the hedge. On an on-going basis Scoville provides updated assessments and hedge mark-to-market.