Project
The University Partnerships Programme (UPP) is the UK’s leading provider of student accommodation infrastructure, owning and managing over 36,000 rooms across 15 universities.
UPP’s success in the sector comes with the administrative task of overseeing the numerous Special Purpose Vehicles (SPVs) which own and operate each of their accommodation assets. This is traditionally done by building an operating model for each SPV, which takes historic financial performance to forecast future results. However, when owning a portfolio of assets, a key difficulty is aggregating the performance of each of the SPVs to show group level performance, which is traditionally a cumbersome process of manually aggregating the results of all of the models. If one of the assets’ performance were to change, or if the board were to be interested to see the impact of a hypothetical change in forecast assumptions on the group returns, this process would need re-running every time.
Operis role
In 2016, UPP approached Operis to help them build operating models for each of the 17 assets they owned at the time, assisting them with evaluating and overseeing the performance of each of their accommodation assets and demonstrating the impact of changing the accounting regime to IFRS.
After building the first ‘template model’ and agreeing with UPP on its functionality and structure, Operis were able to roll out ten models for 10 of their assets, with the final model holding all 7 of the remaining assets cross-collateralised.
Effortless tracking of portfolio performance
Alongside this, Operis was also tasked with building a ‘Dashboard’ model, which would easily aggregate the performance of each of the asset models and remove the need to manipulate data manually to analyse the performance of UPP as a company.
Operis duly delivered a model that would open each model in the portfolio, run any sensitivities or input changes if required, optimise the model given these input changes and then store the results.
These results were then aggregated in the rest of the model to show a consolidated and group level set of financial statements and output metrics. Additionally, individual asset outputs were still saved (for ease of review). A comprehensive suite of audit checks built in each model was stored to give confidence that the macro had run correctly, and no problems were hiding in each of the individual asset models. The final Dashboard model had close to 10,000 audit checks taken from all of the models.
Time-saving solution
With this development, a previously tedious process was reduced to simply pressing a few buttons. UPP were able to see the impact of a variety of different input scenarios with relative ease. UPP themselves were delighted with the Dashboard model and the suite of models as a whole.
This project perfectly illustrates Operis’ ability to simplify complex processes; by building easy to use and interpret models enabling clients to monitor their investments effortlessly and accurately. Operis has since successfully adopted a similar approach for several other asset portfolios.
