Don't bury your head in a book

By Nick Crawley on October 27 2010

Recently, I have had several requests from readers regarding further education in project finance. Rather than reply individually, I thought I would post this in case others were also pondering their options. The main themes were

What is the best way to learn project finance?
Would a PhD help in starting a project finance business?

What is the best way to learn project finance?

Get a job in a Project Finance company, then ask a lot of questions, read case studies and enroll in a good publicly available project finance course. Modelling is a great way to consolidate and test this newly acquired knowledge. For the broad application of the principles in project finance and a commercial challenge, I think the best sectors to develop your knowledge are mining, power and infrastructure. PPP’s, although of course very similar, are very specific and in many organisations are so regimented they have their own teams outside of mainstream project finance. Get involved in a cross border mining or power project in an emerging market to test your knowledge!

I was asked recently whether or not a post graduate professional should pursue a PhD in project finance – my answer is no – this would be a purely academic pursuit. Having spent the last 15 years in the field of project finance, I can say this is one of those areas where respect and knowledge comes from experience and thought leadership, not academic qualifications.

People have different reasons for academic pursuit and depending on the reason I would always be happy to discuss, suggest and potentially even mentor somebody pursuing this area – I have a lot of ideas and theories that need a few years research!

Would a PhD help in starting a business in project finance?

OK, you need experience and passion in the field of project finance. It is deceptively easy to incorporate a company, build a great website and even manage a handful of clients. However building a successful project finance business requires much more than deep experience of project finance, in fact I would argue that with the right technical support this isn’t even necessary (!) although it helps. It’s not rocket science, although that helps too!

Keep in mind that the industry is a global one, so from day one this needs to be factored into business development strategies. Creating a firm that serves just one city or region makes it hard to stay up to date with emerging trends, pricing and key players in other markets – insight into which makes a huge impact on credibility and marketability.