PFM Group Introduces New Public-Private Partnerships Practice Group

Top-Ranked Financial Advisory Firm Now Has Unmatched P3 Capabilities

Jun 27, 2011, 13:30 ET from The PFM Group

PHILADELPHIA, June 27, 2011 /PRNewswire/ -- PFM Group, the nation's leading provider of independent financial advisory services to state and local governments and their agencies, has leapfrogged to the top of the small list of financial advisory firms with special capabilities in Public-Private Partnerships (P3s),  announcing today the creation of a special practice to enhance the firm's services to clients in this growing area of municipal financial advisory.

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"PFM has already had notable success in providing clients with this alternative avenue of financial management," explained PFM CEO and Managing Director John White. "In recent years, our professionals have been involved in all aspects of this process – from modeling, research and exploration of alternatives through policy development and actual implementation," he said. "Our expanded P3 team adds significant transactional experience to PFM's industry expertise in transportation, higher education, ports, airports, utilities and other sectors,"  he added. "With the additional capabilities and outstanding cadre of professionals that our recent acquisition of Scott Balice Strategies brings to PFM, we can be of even greater benefit to our clients.  As trusted independent Financial Advisers, we always strive to help our clients make the right decision," he went on. "While we do not advocate P3 as a sole choice, if it makes sense for our clients, then it is important that we provide a full scope of resources to guide them in making the proper decision and then implementing it successfully," Mr. White concluded.

Tim Carden, a key Managing Director in PFM's new P3 practice with thirty years of experience who joined PFM in May from Scott Balice Strategies, noted several new directions for PFM's P3 Practice that he believes will bring additional advantages to clients.  "We can clearly demonstrate to current and prospective clients the financial and operational benefits of different P3 alternatives to traditional debt financing of capital projects and operations," he said.  "In many cases, well-designed P3 projects are very compatible with traditional approaches to the delivery and operation of public facilities and services. By expanding public sector clients' comfort zones and choice sets, we can help them make the best decision to meet their specific needs. This is added value that most financial advisory firms are not able to provide."

PFM's current roster of P3 professionals is now second to none. The new practice offers considerable transactional experience in P3 projects, having served as independent financial advisers, sell-side advisers to government entities, and buy-side advisers to investors and other industry participants. The combined P3 team at PFM has been involved in more than 30 Public-Private Partnership transactions involving parking assets, transit, highways and toll roads, airports, state lotteries and state alcohol beverage control, among others.

The expanded PFM P3 team currently represents the New Jersey Transit Corporation as sell-side adviser for a concession lease of the Transit Corporation's commuter parking facilities. The group is handling the entire procurement process, including financial modeling and valuation, industry outreach, solicitations, negotiations, documentation and closing. The same P3 project team has also worked with the City of Pittsburgh on its municipal parking privatization and advised the City of Los Angeles on the initial investigation into its parking transaction.

David Miller, a Managing Director at PFM, heads PFM's national transportation practice and has been a longtime advocate of PFM extending its P3 practice. "When the merger with Scott Balice Strategies became a possibility, it was clear that bringing the PFM transportation practice's extensive P3 experience to enhance the capabilities of a new P3 Group would result in excellent new opportunities to better serve PFM clients and prospects," he said. Specializing in P3 toll road and seaport financings,  PFM directly managed engagements for the Maryland Ports Administration (MPA) and the Jacksonville Port Authority (JPA).  The MPA assignment, a $245 million bond financing that enabled the client to significantly increase the capacity of its Seagirt Marine Terminal, was recently named an infrastructure "Deal of the Year" for 2010 by both Infrastructure Investor and Project Finance, who both cited it as an excellent example of an innovative transaction benefiting both the public and private sectors of the business. For JPA, PFM assisted in all aspects of the creative public-private financing for the new Mitsui-TraPac container terminal.  Previous P3 work for PFM clients includes The North Carolina Turnpike Authority's development of the Mid-Currituck Bridge project and the Chesapeake Expressway PPTA project as well as another current PFM engagement as P3 advisor to the Arizona Department of Transportation.

Assuming a principal role and expected to make a major contribution in building PFM's dedicated P3 practice as a Managing Director is seasoned professional Tom Morsch. Morsch brings more than twenty-five years of experience in the development, operation, finance and privatization of transportation infrastructure to PFM's expanded P3 practice.  He was the lead consultant for Scott Balice Strategies advising the State of Illinois in retaining a private manager of the Illinois Lottery, an innovative transaction that resulted in the creation of more than $1 billion in value for the State. He was also project leader on the team advising the State of North Carolina in its exploration of the potential privatization of its state liquor distribution network, an initiative PFM is currently researching for its client the Commonwealth of Pennsylvania. Throughout his career, Mr. Morsch has been involved in numerous public, project-based, and private financings in the toll road, transit and real estate industries.

Another leader of the PFM P3 team is Managing Director Julia Harris, who will be adding her own areas of expertise to PFM's P3 practice as a key resource for clients in the development of privatization strategies.  She has had extensive experience with this sector of financial advisory clients in traditional as well as P3 finance.  Recently, Ms. Harris has worked on privatization strategies for higher education clients in the areas of student housing and parking, and has also been instrumental in explorations of two state lottery privatization projects, including the Illinois Lottery. She also brings a combination of Wall Street investment banking, rating agency and governmental experience to PFM's P3 practice. Previously, Ms. Harris served on Chicago Mayor Richard Daley's staff, focusing her efforts on departmental reorganizations and downsizing, service privatization and managerial efficiencies.  She was a key player on the Goldman Sachs higher education and health care investment banking team and has provided investment banking services to a wide variety of health care and higher education institutions.  

"In addition to these and other partners working in the P3 sector, PFM has a number of very talented, experienced professionals at the next level also," Mr. White explained. "Brien Desilets, a Senior Managing Consultant in PFM's Arlington, Virginia office, will continue his focus on providing advisory services for Public-Private Partnerships, developing optimal financing plans for P3 projects, managing the procurement process and guiding projects through negotiation and financial close," he said. Claire Goodman will work in Chicago and Natasha Holiday in New York, along with Liang Shan in Orlando, to amplify the PFM P3 team.

"What is unique here is that all of these PFM professionals have been deeply involved in a variety of P3 assignments across the country, both for feasibility studies and implementation when warranted," Mr. White added. "As tremendous pressure is brought to bear on local and state entities to provide much needed services and infrastructure improvements for their citizens without increasing tax rates and fees, P3 is a way to put capital into projects while transferring both upfront cost and long-term risk away from taxpayers," he explained. "Our new P3 practice will be at the forefront of this promising field, helping clients forge true partnerships and creating win-win results for both government entities and the private sector. Although P3 is still in its infancy in the U.S. as a financing alternative," he concluded, "the experience we as a firm can provide to clients as they consider various options is a source of added value that is not readily obtained anywhere else."

Public Financial Management, Inc., part of the PFM Group of companies, was the top-ranked independent financial advisory firm in the nation in almost every major category at March 31, 2011, according to Thomson-Reuters, advising on more than $5 billion of total debt in 119 separate transactions during the first quarter of this year alone. Since its founding in 1974, PFM has provided independent financial advisory services to local, state, and regional government and non-profit clients throughout the United States in their dealings with the capital markets.

PFM Asset Management LLC (PFMAM), also part of the PFM Group of companies, is registered with the Securities and Exchange Commission under the Investment Advisers Act of 1940. PFMAM had $42.0 billion in assets under management and provided investment consulting services for an additional $19.9 billion in securities as of March 31, 2011. PFM's clients are state and local governments, non-profit corporations, pension funds, and similar institutional investors.

In addition to this new Public-Private Partnership practice, the PFM Group of companies also provides best practices strategic consulting and pension advisory consulting services and currently employs more than 440 individuals serving a broad base of clients from locations in every region of the country.