Where do we invest, what do we keep and what do we exit?
Assigns each business a role in the portfolio and allocates capital among them.
What you receive
Invest, hold or exit for each business, and the capital allocation plan.
Each business placed by market attractiveness and competitive position, sized by the capital it employs.
When to open it
- Your finance team opens capital allocation for the next plan.
- A business earns less than its cost of capital.
- Buyers approach one of the businesses.
What the project covers
- Market attractiveness of each business
- Competitive position and right to win
- Return on capital against cost of capital, by business
- Value creation under invest, hold and exit scenarios
- Parenting fit: what the group adds to each business
What your team brings
- Financial statements by business unit
- Capital employed and investment plans
- Strategic plans of each business
- Market data the businesses already track
- Group cost of capital and hurdle rates
In your report
- Exhibit 1
Businesses mapped by attractiveness and position, sized by capital
Each business placed by market attractiveness and competitive position, sized by the capital it employs.
- Exhibit 2
Return on capital shows which businesses create value
Return on capital by business, set against the group's cost of capital.
Where it applies
- Insurance
Should we keep, reunderwrite or exit our commercial motor book?
The capital the book ties up against the return it earns over the underwriting cycle.
- Consumer goods and retail
Which stores should we close, resize or relocate over the next three years?
Profit by store, lease exit terms and how much of a closed store's sales moves to nearby stores or online.
- Chemicals, materials and mining
Should we sell our commodity chemicals business and focus on specialty products?
Returns through the cycle for each business, the buyers for the commodity assets and the costs the two share.
- Energy and utilities
How should we split our capital plan between networks, renewables and gas assets?
Regulated and market returns, asset life and the policy risk on each asset class.
- Healthcare and life sciences
Which therapy areas should we keep funding, and which should we divest?
Pipeline value, market position and the capital each area needs to reach approval.
- Real estate and construction
Which office buildings should we sell, convert or keep, and where should we reinvest the proceeds?
Occupancy and rent by building, the cost of each conversion and the returns on logistics and residential assets.
- Public sector
With a fixed capital budget, which infrastructure projects should we fund over the next five years?
The social and economic return of each project, the cost of delay and our capacity to deliver it.
- Private equity
When should we sell, and to which buyers?
The value created against plan, buyer appetite and the case the next owner has to believe.
Start with this engagement
Write to hello@tacitude.com with the project you have in mind, and we frame the engagement with your team.