Case
Managing Risk under New Climate Legislation
Analysis Group has helped companies assess complex investment and risk management problems and implement strategies in the face of the high regulatory uncertainty and volatility of prices in today's energy markets. In a recent assignment, an Analysis Group team led by Managing Principals Brian S. Gorin and Marc Van Audenrode performed a series of technical financial analyses to help a leading natural resource company mitigate the risks of its investments in current energy markets – including the risks posed by national climate policies.
For these analyses, we employed statistical modeling to simulate future market conditions in the context of potential policy changes. As part of our simulation, we considered potential financial hedges that the company could employ to balance the risks imposed by existing operations and future investments being considered. Our analysis also took into account the use of alternative financial instruments (e.g., forwards, puts, calls, and more complex derivatives) and the realities of available financial products in energy markets, where the great variation in market liquidity for alternative financial products poses both challenges and opportunities for developing effective hedging strategies.
Based on our analyses, our client was able to develop a risk management strategy consisting of a combination of contractual and market mechanisms. This strategy allowed it to move forward with its planned investment.
Meet Our People
Marc Van Audenrode*
Managing Principal*Dr. Van Audenrode is an expert in data analysis and econometrics, labor economics, antitrust and competition policy, and public economics. He has consulted to clients - including law firms and government agencies - in Canada, the US, and Europe. Dr. Van Audenrode’s work includes developing a methodology to value desktop software; he also developed expertise valuing goods as varied as restaurant franchises, executive stock options, or smartphone features. His recent work in public economics includes evaluating the economic rent from hydroelectricity to the Canadian economy and the value of logging rights on the ancestral territory of a Canadian First Nation. In the area of labor economics, his work has included filing an expert report assessing fair compensation for Quebec provincial judges and Quebec prosecutors and advising Quebec’s commission on pay equity. Dr. Van Audenrode has filed expert reports in courts in the US, Canada, Belgium, Germany, France, and the Netherlands, and has testified in Canada and the US. He recently filed a report with the Amsterdam Court of Appeal in support of the settlement reached between Ageas and claimant organizations in the Fortis case, the largest settlement ever reached through the Dutch Collective Settlement Act (WCAM). Dr. Van Audenrode’s scientific research and articles have been published in numerous peer-reviewed academic journals and trade journals. He is a coauthor of the book The Mutual Fund Industry: Competition and Investor Welfare, and is a frequent presenter at industry and academic conferences.
*Marc Van Audenrode srl