Local Authority Investment & Portfolio Management
What we do
We act as the principal portfolio and asset management advisor to Wyre Forest District Council's Capital Portfolio Fund. We are also responsible for coordinating all other advisers/professionals to the council's Capital Portfolio Fund (this includes internal estates teams, legal and financial, external managing agents, agents, valuers and other professional advisors).
Local Authority Portfolio & Asset Management
Our business goal, and the primary reason we established Jones Valerio, is to provide Local Authorities with the opportunity to access the same degree (and more) of analysis, strategy, planning, delivery and reporting as found in a traditional institutional level real estate investment management model.
Our purpose
We have developed, innovated and dramatically improved upon a traditional institutional level portfolio investment management model with the key aim of providing an opportunity for Local Authorities to access and benefit from our highly sophisticated investment management approach and methodology.
Our strength
Our strength is through the successful combination of investment and asset management into a single investment management business. Our structure enables us to build our business around the portfolio requirements of a Local Authority, whilst importantly remaining agile enough to identify and deliver activity at an asset level.
Our model
Our Strategic Model encompasses the entire lifecycle of real estate investment management from acquisition through to disposal and everything in between, arranged over five specific pillars of analysis, strategy, planning, delivery and reporting.
Our resources
We have developed a full suite of digital resources and tools to support our service delivery, and a policy that all assets in a fund are treated as being Ready for Sale. Therefore our approach seeks to ensure that any information, measures and actions that require attention/completion prior to sale are known and recorded, to enable the risk or opportunity to be reduced or realised respectively. This process is therefore included in our Procedure Guidance.
Investment Strategy Documents
Setting and achieving goals is the hallmark of a successful strategy and the overarching strategy for any traditional real estate investor is to reduce security and liquidity risk, and to increase capital value and revenue streams.
For Local Authorities, there is a specific additional and fundamental element incorporated into the strategy, which is to achieve operational economic benefits and regeneration whilst also providing a net revenue stream.
Management Alignment Plans
We developed this during 2020 for a specific Local Authority and is essentially a bespoke product devised to identify all activity across the council’s portfolio and generate a Management Alignment Plan (MAP) to help create a highly efficient management platform akin to that of a well performing institutional investor.
Purchase Cashflow Appraisals
Alongside any client adopted fiscal analysis tools, such as the KPMG Model (adopted by Wyre Forest District Council) and the function of PWLB borrowing, we also provide detailed cashflow models to calculate Internal Rate of Return for risk/upside analysis and business planning/modelling to assist decision making for both purchase and major asset management proposals.
Strategic Asset Level Business Plans (SALBP)
SALBPs are live working documents. Activity is continuously updated as risks and opportunities are progressed during the respective quarter. The SALBPs provide a uniform and scientific basis and approach enabling activity to be tracked from inception through to completion. This business plan model that we use uniquely links each asset together mathematically, which displays identical Performance Components at a portfolio level.
Performance Components
We use five defined areas of individual asset performance which automatically link to the Local Authority’s portfolio performance and map the impact of any potential acquisition or required disposal on the portfolio performance. The five components are Legal & Financial Physical, Maintaining, Active and Pro-Active Performance.
Procedure Guidance and Client Approval Forms
The primary purpose is to set out the procedure for all of the investment management activities across the portfolio to assist with delivery performance. Procedure Guidance Client Approval Forms (CAF) are a function of Procedure Guidance and provide the additional benefit in assisting with accountability of all decisions made, particularly helpful for Local Authority auditors.
The CAFs are a prescriptive approval process for each activity, which provides total transparency, accountability and timing of delivery from any appointment through to completion. This encompasses all activity carried out by any Local Authority estate manager and officer, or third party property manager.
Major Project and Initiative Oversight
We take ownership of agreed activities that often require engagement of various other professionals in support of the strategy delivery. We include all major works within the reporting and ensure we maintain oversight from inception to completion.
Ready for Sale Package
It is essential that assets to be disposed of are provided with the best opportunity to achieve best value in the shortest time possible, as timing and capital liquidity is key. We adopt a policy that all assets in a fund are treated as being Ready for Sale, therefore our approach seeks to ensure that any information, measures and actions that require attention/completion prior to sale are known and recorded, to enable the risk or opportunity to be reduced or realised respectively. This process is therefore included in our Procedure Guidance.
Proportionality Test
As part of CIPFA guidance we have developed a Proportionality Test for one Local Authority client, which is designed to assist the Local Authority in their annual budget setting.
The Proportionality Test is a mathematical tool, which estimates risk and amount of any income shortfall deriving from a Local Authority’s property portfolio. This assists the s.151 Officer with the setting of the council’s annual budget (as a requirement of Capital Strategy and MTFS) to best plan for any unforeseen income shortfalls.
Quarterly Fund Report (QFR)
Our QFR is delivered and presented to both Overview & Scrutiny Committee and Cabinet one month after the standard Quarter Days. The QFR is arranged into five specific parts as briefly explained below:
1. Strategic Reporting
Strategy, the property market, the balance and portfolio sector weightings alongside a logical proposal for acquisitions and disposals.
2. Measurement Reporting
Tracking portfolio performance against multiple KPI’s, plus market benchmarking.
3. Asset Management Reporting
In addition to the traditional commentary and portfolio data, we also provide quarterly projections of income and risk.
4. Business Plans
Strategic Asset Level Business Plans are provided quarterly along with various appendices for record keeping and decision making.
5. Appendices
The various appendices are for both reference when reporting but also as a vital source of data for record keeping and decision making.