The risk matrix of a project finance SPV in the healthcare sector

New or restructured healthcare infrastructures are a typical risky investment, which can be financed in many different and competing ways. Public Private Partnership and project financing techniques are increasingly recognized as an useful and appropriate device. Risk identification, transfer, sharing and management are a key point of the whole structure and a risk matrix, used in order to classify and - wherever possible - measure risk is an unavoidable part of the package. To the extent that it can be professionally managed by specialized agents, risk sharing or transmission is not a zero sum game. While the public part traditionally bears core market risk (demand for health services), other key risks, such as those related to construction and management of commercial (hot) activities, are typically transferred to the private part, often represented by a SPV. An analysis of the SPV's governance peculiarities helps to understand why milder information asymmetries and softer conflicts of interest can allow for higher even if unsecured leverage. An original link between financial and operating risk is proposed in this paper, together with an analytical description of the main kinds of risk.