Strategic portfolio analysis - a new approach

Jim Fitzgerald and Andreas Gertsch Grover describe a new technique that allows energy traders and risk managers to play an important role in asset investment decisions

Portfolio effects are well known to energy traders and risk managers. The effect is less well known to strategy and investment managers, who traditionally make asset investment decisions on a stand-alone basis using price forecasts that neglect portfolio effects. A new technique, strategic portfolio analysis (SPA), joins these two approaches. SPA can be used by, for example, gas producing companies to assess how and when to diversify into downstream power generation assets. It can also serve