SD-04.10 — Direct Real-Asset Management

Business Domain: BD-04 Direct & Co-Investment (Front office) · Applies: PRIV

Purpose

Manages a directly-held real asset — real estate, infrastructure, or a natural-resource asset such as timberland, farmland or a producing energy or mining asset — through its operating life. Direct Real-Asset Management is the real-asset-mode post-close discipline — one of BD-04’s three: where SD-04.8 stewards a held company and SD-04.12 monitors a held loan, this Service Domain operates a held physical asset. For a directly-held real asset the operating phase is long — often decades — and the management of the asset is the return.

A directly-held timberland, farmland or producing natural-resource asset is operated here, alongside real estate and infrastructure — natural resources is a direct-investment mode in its own right. The operating disciplines — operations and maintenance, the capex programme, performance monitoring — generalise across all three real-asset types; harvest, crop and extraction management is the natural-resource-specific operation. The Service Domain is not real-estate-only — “real asset” is the union of real estate, infrastructure and natural resources, and SD-04.10 operates each.

Service Operations

Manage leasing and tenancy — letting, lease renewals, rent reviews and tenant management for a real-estate asset.
Run operations and maintenance — operate and maintain the asset, directly or through an appointed operations-and-maintenance contractor.
Manage harvest, crop and extraction operations — the natural-resource operating cycle: timber harvest scheduling, farmland crop and land management, and the production management of a producing energy or mining asset, run directly or through a specialist operator (a timberland investment management organisation or farmland operator).
Plan and deliver the capex programme — the multi-year, risk-based capital programme that sustains and improves the asset.
Manage concession and regulatory engagement — concession compliance, regulatory-asset-base management, and the periodic regulatory price-review settlement for a regulated infrastructure asset.
Execute the asset business plan — run the asset against its business plan and value-creation objectives.
Monitor operating performance — track the asset against its operating, availability and yield KPIs.

Inputs and outputs

Inputs: the operating real asset — from SD-04.6 for a brownfield acquisition, or from SD-04.11 at commissioning for a developed asset; the concession or regulatory framework; the asset business plan.
Outputs: the operating cash flow, the delivered capex, the regulatory submissions and the performance reports — feeding SD-04.9 when the asset is to be realised, and BD-09 Performance & Analytics.

Entities

Consumes: Direct Real Asset (RA-01), Appraisal (RA-05); the SD-04.11 operating real asset; the SD-04.6 operating real asset.
Owns: the operating record of a directly-held real asset (RA-02) — SD-04.10 is its authoritative source; and RA-03 Lease / Tenancy — the lease-as-data entity (rent, reviews, breaks, tenancy status), set and maintained through leasing, renewals, rent reviews and tenant management. SD-14.9 holds legal custody of the executed lease document; SD-04.10 is the authoritative source for the lease’s economic content.

Standards

Operations-and-maintenance agreement conventions; the regulatory-asset-base model and the regulatory price-control / price-review regime; the ISO 55000 asset-management family as the asset-management discipline.
For natural-resource assets — the sustainable-forestry certification standards (FSC, SFI), sustainable-agriculture and farmland-management practice, and the operating conventions of the timberland investment management organisation (TIMO) and farmland-operator model.

Open extensions

The boundary with SD-04.11 — SD-04.11 builds the asset; SD-04.10 operates it, taking hand-over at commissioning.
The interaction with SD-08.3 Private-Asset Valuation on the periodic appraisal of the operating asset.