Conference on Cost of Capital and Financing of Regulated Industries

Thursday 7 & Friday 8 June 2007
Xfi Centre for Finance and Investment
University of Exeter

Presentations

Papers

The conference is organised and sponsored by the Xfi Centre, University of Exeter and is supported by the Competition Commission.

It will consider the extent to which conventional regulatory approaches may need to develop to reflect factors such as the changes and diversity in financial and ownership structures in the regulated sectors; attitudes to risk and incentives to optimise capital and other investment.

It is intended to appeal to academics; regulators and regulated companies; investors; bankers and other financiers; and regulatory, economic and financial consultants.

The broad aim of the conference is to provide an open forum under Chatham House rules to discuss a wide range of ideas relating to the cost of capital and the financing of regulated industries.  Unless stated otherwise by speakers, panellists or other participants, the views that may be expressed by them in papers, presentations and discussions are those of the individuals themselves, and should not be taken as representative of the official position of any organisations with which they are associated.  No-one is expected to comment on any regulatory inquiry or other business with which either they or their organisations may be involved.

Thursday 7 June

12.15 on Registration  
12.45 Lunch  
1.30 - 1.40 Introduction and welcome Steve Smith (Vice Chancellor, University of Exeter )
Alan Gregory ( University of Exeter )
Christopher Clarke ( Competition Commission )
CC's perspective of the conference 
 
1.40 - 2.30 Session 1: Overview   
  Tim Jenkinson (Saïd Business School, Oxford University and CEPR):
Regulation and the Cost of Capital
30 mins
  Lakis Athanasiou (Collins Stewart)
Observations from the investment community
20 mins
2.30 - 4.30 Session 2: Cost of capital 
Session Chair: Dr Luis Correia da Sliva ( Oxera ) 		 
  Stephen Gibson ( Ofcom )
Disaggregating BT's equity beta		 20 mins
  Andrew Stark (Manchester Business School)
Estimating The Fama And French Factors In The UK – An Empirical Review
 20 mins
3.10 - 3.30 Tea/Coffee  
  Alan Gregory ( University of Exeter ) and
Maria Michou ( University of Edinburgh )
Industry Cost of Capital in the UK 		20 mins
  Daniella Acker ( University of Bristol )
Problems in Beta Estimation: Reference-Day Risk
and The Use Of Monthly Returns Data 		20 mins
  Julian Franks ( London Business School )
Debt Betas 		20 mins
4.30 - 5.10 Session 3: Panel Discussion, round-up of first two sessions 
Chair: Dr Luis Correia da Sliva (Oxera)
Panellists:
Daniella Acker (University of Bristol)
Lakis Athanasiou (Collins Stewart)
Julian Franks (London Business School)
Stephen Gibson (Ofcom)
Alan Gregory (University of Exeter)
Tim Jenkinson (Saïd Business School, Oxford University and CEPR)
Maria Michou (University of Edinburgh)
Andrew Stark (Manchester Business School)		 40 mins
5.10 - 5.20 Short Break 10 mins
5.20 - 6.45 Session 4: Changing Ownership and Capital Structure - the investors' perspective
Session Chair: Ian Tonks ( University of Exeter/Bank of England ) 		 
  Graeme Conway - (Macquarie)
Investor Perspective 1
 20 mins
  Cressida Hogg ( 3i )
Investor Perspective 2
 20 mins
  Panel discussion Session 4
Chair: Ian Tonks (University of Exeter/Bank of England)
Panellists:
Graeme Conway - (Macquarie)
Shams Butt (Citigroup)
Nick Fincham (CAAERG)
Cressida Hogg (3i)		 45 mins
7.30 Conference Dinner - Hotel Barcelona  

Friday 8 June

9.00 - 9.10 Introduction to second day - Alan Gregory  10 mins
9.10 - 10.30 Session 5: Developments in Regulatory Approaches to Financing and the Cost of Capital
Session Chair: John Smith ( Competition Commission )		  
  Keith Mason ( Ofwat )
Financing Issues in the Water Sector
20 mins
  Rob Francis, ( Frontier Economics )
Allowance for the cost of debt in the regulated cost of capital:
Options for regulators and regulated companies
20 mins
 

Kieran Donoghue ( Ofgem )
Setting Allowed Returns for Energy
Networks

20 mins
  John Earwaker ( First Economics )
Automatic adjustment of cost of capital		 20 mins
10.30 - 10.55 Coffee/Tea  
10.55 - 12.20 Session 6: Corporate perspective of investment financing 
Session Chair: David Ashton ( University of Bristol ) 		 
  Jonson Cox ( Anglian )
Incentives for Financing Efficiency		 20 mins
  Tom Fallon ( United Utilities )
Insights into raising long term index-linked debt
20 mins
  Panel discussion sessions 5 & 6
Chair: Session Chair: David Ashton (University of Bristol)
Panellists:
Jonson Cox (Anglian)
Martin Crouch (Ofgem)
Kieran Donoghue (Ofgem)
John Earwaker (First Economics)
Tom Fallon (United Utilities)
Rob Francis, (Frontier Economics)
Carl Hetherington (Office of Rail Regulation)
Keith Mason (Ofwat)		 45 mins
12.20 - 12.30 Short Break  
12.30 - 1.30 Session 7: Panel Discussion (of all sessions) and Round-up 
Session Chair: Julian Franks ( LBS )
Panellists:
Peter Bucks (Ofgem)
John Earwaker (First Economics)
Nick Fincham (CAAERG)
Keith Richards (South West Water)
John Smith (Competition Commission)
Andrew Stark (Manchester Business School)
 60 mins 
1.30 Lunch  

Conference details

The cost of the conference, including lunches on both days, refreshments, conference dinner and drinks at the Hotel Barcelona, (but not accommodation), will be £195 per person, with a subsidised rate for full time academics of £60.

Those interested in participating in the Conference as delegates should complete and return a registration form as soon as possible.

Enquiries should be directed to Rosemary Phillips at R.Phillips@exeter.ac.uk