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Paul-Henry Loitron
Financial director at Egis
Published on July 13, 2021

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Paul-Henry Loitron: inside a career in financial engineering

In charge of the financial engineering department at Egis for the past four years, Paul-Henry is working to diversify the range of consultancy services offered by the group. In the development of this financial dimension, his role allows room for different areas of expertise, in addition to the engagement with public as well as private clients during the design and implementation of their own projects.

- Crédits : Adoleu Elethu - Unsplash

What is financial engineering in practice?

Financial engineering is a specialisation that lies in between the actuarial, financial, economic, legal and fiscal fields. It can be defined as the ability to conceptualise and implement financial packages that are perfectly adapted to the needs and goals of our clients.

In practice, financial engineering brings together a set of financial methods and techniques that make it possible to achieve goals related to finance, value and investment in a company, a shareholder or even the public. It is an essential aspect of controlling the viability and realisation of a project.

Could you give an example of some "classic" projects related to your job?

Our services can be provided at all stages of a project's life:

  • The upstream phase first studies the feasibility and financial viability of a project. Next, it compares financially different investment and management methods (which includes public service, concession contracts or partnership contracts), and finally, carries out prospective budgetary studies, and produces reliable business plans.
  • The operational phase starts with the design, development or auditing of financial models for infrastructure, or even real estate projects. Following this, it then assists clients in the preparation of their technical and financial documentation, and finally, the search for financing and/or subsidies.
  • The downstream phase follows the analysis and monitoring of projects in the operational phase at first instance, in order to carry out the financial reporting to lending, supervisory or subsidising bodies.

 

What is the added value of financial engineering within a project?

The added value of financial engineering in a project is difficult to quantify. What is certain is that it will be very difficult, if not impossible, to carry out a project without a serious analysis of its financial viability.

Other aspects, such as social benefits or environmental benefits, are of course taken into account. However, if the project is structurally and heavily in deficit, the project owner, whether it be public or private, will have to redefine his goals.

There was a time when the requirement for financial balance and profitability was not a fundamental  decision-making criterion for public authorities. In recent years following the financial crisis of 2008, public entities, under the combined effect the reduction in their allocations, the introduction of greater control over their expenditure (Cour des Comptes, NOTRé law) and a less favourable economic climate, have increasingly called on financial advisors to ensure the financial feasibility and relevance of setting up a particular service or infrastructure in the long term. In this case, when it can prove to be challenging, our support could help to redefine the scope and the general budget in order to structure and complete the financing of the project.

How do we approach financial engineering at Egis?

This line of business has existed for many years within Egis Consulting business unit, and several factors have led to its creation. One of them was to be able to offer our clients an internal expertise for a matter that always come up at a time or another when facing with a complex project.

In my opinion, one of the primary roles of this line of work is to support our engineering staff in carrying out their general project management assistance (PMA), by bringing our expertise to fulfil a project’s optimal realisation.

As a result of its success, financial engineering is now being exported throughout the group, as well as outside the group, exclusively working towards the fulfilment of financial projects and is keen to develop more offers to their service.

What new services have you recently development?

I would say that 3 new services have been recently released.

Green finance is a particular subject that we are firmly dedicated to, and where there is still plenty of work that needs being done. For now, we are working on green bonds and ISR label labelling that has just recently been introduced.

Asset management consultancy is another service we developed to provide our clients, which includes a turnkey solution encompassing the entire life cycle of an asset from the determination of the building's purpose to marketing, including all stages of audit and refurbishment.

Finally, support in obtaining grants and seeking funding is an offer designed to meet the growing demand of public actors who are facing an environment (whether it be economic or legislative) that is contributing to the exhaustion of their funding. From this perspective, obtaining grants or subsidies can sometimes be an essential factor for the realisation of a project. On a similar note, not all project leaders have developed the expertise to prepare quality documentation to the designated interest banks, or potential financiers in a project.

What profile and skills are required to do this job?

In order to work in the financial engineering business line, it will be essential to have a good command of financial statements and the main accounting principles. The main qualities that are most frequently sought are discipline, organisation, as well as good analytical and interpersonal skills. The financial engineer ultimately must be able to act as a "translator", in order to facilitate and make financial statements understandable to the various technical experts with whom he or she will be working with.

Furthermore, one of the differentiating factors that we have within the Egis board is the diversity of profiles and expertise that coexist: our staff includes engineers, urban planners, architects, financiers, etc., among others.

This diversity allows us to have an operational project approach and a good understanding of the different aspects and issues of the mission. Our open-mindedness and flexibility in regards to non-financial matters is essential for the successful completion of our assignments, as we also happen to offer our clients more convenience in contacting one person from our team to deal with all technical, legal, regulatory and financial issues relating to the project.

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