Infrastructure Investor: Polish up your value creation

Michael Harrington, Partner and Chief Investment Officer at Actis, spoke with Jon Yarker for Infrastructure Investor’s feature on value creation. In his comments, Michael explores how AI is driving new value by providing productivity gains and reducing costs, discusses Actis’ due diligence checklist and how Actis’ ownership model also drives further value. Click here to read the full article online, here to read it in the digital issue of the magazine or read on below for a snapshot of Michael’s commentary.

Michael Harrington, Partner and Chief Investment Officer at Actis, commented:

[On Actis’ use of AI]

“AI is a broad term, but using algorithms within equipment – for example, a wind farm being able to better predict curtailment issues that might occur within a system by looking at the metadata – we are doing that more.

“We also use tech such as smart meters, drones and sensors connected to the Internet of Things, concurrently with AI, to obtain more data, derive intelligence and tackle potential issues before they become concrete operational problems.

“AI is revolutionary and is already providing productivity gains, enhancing revenues and helping reduce costs.”

[On Actis’ due diligence processes]

“We have a 20-point ‘asset healthcare checklist’ that we go through in a diligence process – this will help dictate what the operations plan will be in the first 100 days.

“That will vary across each type of business and asset. We are underwriting operational improvements, and we see on average anywhere between 200 and 300bps of operational improvement on long-term plans.”