Corporate Finance Principal Equity Specialist

We are Ofwat, the Water Services Regulation Authority, a non-ministerial government department responsible for regulating the water sector in England and Wales.

We have an opportunity for a Financial Economist / Corporate Finance Principal to join our Risk & Return Team within Price Review Directorate.

The water sector is entering a new chapter. Following the Independent Water Commissions Final Report and subsequent White Paper - 'New Vision for Water' , the UK government has set out a bold new direction - one that brings together expertise from across the sector to deliver better outcomes for customers and the environment.

Ofwat is working in collaboration with the government and other regulators to help establish a new body for England, combining our strengths with those of the Drinking Water Inspectorate, the Environment Agency, and Natural England. Were also continuing to engage with the Welsh Government to support future decisions for Wales.

While these changes take shape, our mission remains the same: to hold water companies to account, drive performance, and ensure the sector delivers real value for customers, communities, and the environment. If youre passionate about making a difference, this is a unique moment to join us and help shape the future of water, and together we can continue to make a positive impact.

You can find out more about why you should join Ofwat, our strategy, values and our framework for success in the attached Information for Candidates Pack.

We are seeking an experienced Financial Economist or Corporate Finance Equity Specialist to join our Risk & Return team within the Price Review Directorate to help with preparations for PR29, the price review covering the period 2030-2035.

The work of the Risk & Return team is divided into four main workstreams:

• Allowed return on capital: setting the base allowed return on equity and debt companies will receive.
• Balance of risk: justifying the likely distribution of financial returns around the base return, once performance-related incentives are reflected.
• Financeability: evidencing that efficiently run water companies should be able to achieve a strong investment-grade credit rating.
• Cost recovery: justifying the balance between cost recovery over 2025-30 and future periods; applying concepts of depreciation and intergenerational equity.

Our most recent decisions on these areas are summarised in our December 2024 Aligning Risk & Return Appendix and our Allowed Return on Capital Appendix .

The successful candidate will play an important role in determining our methodology for the allowed return on equity for PR29. We expect the draft and final methodology for PR29 to be published in 2027.

The allowed return on equity is part of the allowed return on capital, which is expressed as a weighted average cost of capital (WACC), which aims to cover efficient debt and equity costs. The WACC currently accounts for around a quarter of the average household bill.

The aim is for a process that fairly remunerates companies for the risks they bear, while protecting customers from paying for excessively high returns. Key considerations include:

• CAPM inputs and estimation issues : PR29 is likely to use the Capital Asset Pricing Model as a primary approach to estimating the allowed return. The CAPM has three inputs (risk-free rate, total market return, and equity beta). Stakeholders have challenged established ways of estimating these parameters, and understanding and responding to the particular arguments will be important to ensure the eventual policy is well-founded.
• Role of cross-checks : The CAPM is one asset pricing model of many. Ofwat will need to consider how much weight to place on cross-checks to the CAPM in deciding the point estimate for the allowed return on equity.
• Wider policy context : In line with the recommendations of the 2026 Water White Paper, Ofwat is reviewing its approach to incentive-based risk and participating in a UKRN project to increase consistency in allowed return-setting approach across regulators. Risk exposure to incentives is likely to be relevant to required equity returns for UK water stocks.

In due course we expect the role will also involve providing ad hoc advice on cost of equity matters to other directorates within Ofwat whose work touches on this area.

Key deliverables:

In this role you will be expected to:

• Plan and prioritise your time - working to team-level and directorate-level milestones, and where new developments may require reprioritisation.
• Interpret financial data, arguments and analysis for instance from company consultant reports and papers they reference.
• Monitor market data to develop a well-informed understanding of equity investor sentiment by considering equity analyst commentary from Ofwat's subscriptions as well as the features of recent equity transactions.
• Conduct and commission financial analysis for instance using the latest market data to estimate the return on equity using the CAPM.
• Draft slide packs and documents for instance drafting a discussion paper to inform a cost of equity workshop or consultation, or a slidepack for a discussion that helps Ofwat Board to decide whether to sign-off on a cost of equity policy proposal.
• Verbally present findings for instance briefing the team's Director on the key findings of review work or analysis.
• Develop and interrogate Excel-based models while not primarily a modelling role, it will likely involve some scrutiny of non-Ofwat models and may involve having a hand in developing in-house models to support our policy areas.
• Oversee junior staff time the role is likely to involve managing the time of 1 junior colleague, and potentially more during peak periods (e.g. a graduate).
• Build relationships in particular with other Risk & Return team members, and other Ofwat teams where there is thematic overlap, and external stakeholders such as counterparts in other regulators, or investors.
• Develop skills to build on your existing base of financial knowledge and skills through taking on structured or unstructured learning opportunities.

To be successful in this role you will need the below essential attributes, experience, skills and knowledge:

Experience, skills and knowledge

1. Lead criterion: Experience in applying financial economics and/or corporate finance to the analysis of equity pricing.
2. Advanced understanding of financial economics and/or corporate finance theory related to the cost of equity (particularly e.g. asset pricing models e.g. the CAPM).
3. Advanced ...