Alternative Finance

Our Approach

More than ever before, public sector clients have the choice of utilizing private financing sources in addition to traditional public financing. When our clients weigh using private capital to support public goals, we are by their side to provide rigorously independent and objective counsel. We help clients evaluate any number of alternative financing techniques in order to create benefit for the public.

What’s distinctive about our approach to alternative finance is our decades-deep grounding in public finance. This expertise places us in an optimal position to understand all of the financing tools at our clients’ disposal.

As the nation’s leading financial advisor to public institutions, according to Thomson-Reuters, we consider every alternative objectively to help our clients decide what works best. Our advice isn’t cookie-cutter. We never sell our clients a prescribed set of solutions, as many of our competitors are incentivized to do. 

We help our clients achieve their desired outcomes for projects involving the private sector by supporting the skillful coordination of relationships among numerous public and private interests that must be properly and fairly balanced. We have been a reliable partner on many projects of this type, and bring both our financial and our procedural knowledge to the table on our clients’ behalf.

Some of the many sectors for which we provide this work include transportation, higher education, environmental utilities, state and local governments, transit-oriented development, sports, leisure & cultural facilities, re-development of downtowns including civic centers, military base re-use, seaports, airports and environmental finance including PACE.
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Our Solutions

Here are some of the alternative finance solutions in which we specialize:

Public Private Partnerships and Economic Development

PFM has established a clear focus and leadership position in managing the growing use of private capital to support economic development and other public purposes. These projects require a careful balancing of the risks and rewards associated with private capital, and objective analysis of the best mixture of public and private sources. To the extent private capital is useful, PFM supports its clients in mitigating risks, in negotiating agreements with developers, and in managing transactions toward successful closings. When appropriately used, private sources can reduce reliance on scarce public revenues, and assist in creating long-term economic growth. 

Developer Selection and Negotiation

PFM supports public jurisdictions in qualifying, selecting and negotiating with developers. This process must be started with clear objectives that can guide the process to conclusion. We help ensure that developers provide full disclosure of their capacity and experience. We provide in-depth analysis of their financial capacity, their pro formas for projects and the risks associated with their approaches. Once selected, we support the development of thorough and thoughtful contractual arrangements that mitigate the public’s risks and maximize public return on investment. PFM helps manage this process efficiently to ensure that market opportunities are captured on a timely basis.

Asset & Real Estate Portfolio Analysis & Monetization

Municipalities and non-profit institutions typically have a combination of significant real estate and system assets and the need to determine and achieve their best use. PFM helps clients devise strategies for how to manage real estate assets without undervaluing or foregoing benefits that the private sector might enjoy if they were to own the assets.

We also help our municipal clients understand the considerations associated with monetization, such as the sale or long-term lease of utility, parking or other revenue generating assets. While the sale of an essential purpose asset like a sewer or water system can be complicated, understanding the motivations for such a monetization is critical in designing appropriate transactions that meet our clients’ objectives. Many factors, such as the desire for local control, the acceleration of deferred maintenance, and user rate stability often have to be balanced in order to arrive at successful transaction terms. PFM alternative finance professionals know how to get these or other features into related transaction documents for the benefit of our clients and the stakeholders they serve.

Environmental Finance

PFM’s financial advisory professionals have extensive experience with innovative programs dedicated to creating and implementing “green” projects and initiatives, ranging from energy efficiency improvements, to water efficiency installations, to renewable energy and climate-resilient infrastructure and implementation, to name a few. Combining cutting edge environmental transaction structures with decades of experience in utility project economics and PFM’s core public finance expertise, we assist a broad range of clients nationwide in implementing projects that often provide energy and water cost savings in excess of debt service.

We partner with clients to structure and implement financing tools including Property Assessed Clean Energy (PACE), revolving loan funds, power purchase agreements (PPAs), energy service performance contracts (ESPCs) and Energy Services Agreements (ESAs), lease-purchase agreements, on-bill financing, and municipal and green bonds. Many other types of financing structures and project types can be utilized within the scope of environmental finance. Our commitment to innovative and cost-saving solutions benefits both our clients, and the environment as a whole.

Tax Credit & Incentive Policies

In today’s environment, companies often shop their potential investments among several locations and expect municipalities to compete for their business. Municipalities with the most effective tax policies are often the long-term winners. From the state level down to local jurisdictions, PFM helps our clients develop policies that are reasonable, potentially attractive to the private sector, and protective of our clients’ long-term financial interests.

For More Information

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