Click and Buy: Infrastructure investments rethought for institutional investors
Infrastructure is one of the megatrends in the global financial markets. Governments are launching multi-billion investment programmes and raising large sums of private capital in order to create modern and efficient infrastructure and to trim the economy towards climate neutrality. European Debt Solutions GmbH (EDS) now offers institutional investors an efficient way to participate in this trend. “With a click of the mouse, you can look for suitable projects with us – transparently, quickly and cost-effectively,” says Sebastian Bergmann, Managing Director of EDS.
Around the world, the large industrialised countries in particular are working to expand their infrastructure and make it fit for the future. Alternative plants for energy generation are needed, smart grids must be created for digitalisation and climate protection, and the modernisation of supply and disposal is also on the agenda. Large sums of money are needed for this: According to studies, the goal of making Germany climate-neutral alone requires around five trillion euros. “The private sector will have to shoulder the bulk of the investment, which will create interesting investment opportunities,” says Bergmann. The willingness to do so is there, after all, infrastructure investments promise long-term and relatively stable returns.
EDS now offers institutional investors a simple and clearly structured way to invest their money in this sector: Under the heading “Infrastructure Debt 2.0”, EDS is taking over parts of its verified infrastructure loans from various banks. Investors are then offered these on the EDS platform. “Investors select the investments they want and decide how much they want to be involved,” Bergmann explains: “Simply by clicking a mouse.” They can make their selection according to various criteria: for example, by sector, industry, rating, volume, region or currency. “Click and buy – that has not been done before,” says Bergmann.
In addition, investors can choose their preferred regulatory structure: Funds in Germany or Luxembourg, a securitisation or even an individual solution provided by EDS with best-in-class partners. “This turns into an investment with an impeccable structure, well documented and with subsequent reporting,” says Bergmann. “This is what investors dream of.”
A decisive advantage here is transparency: “Anyone investing in new funds always starts with a black box. In contrast, with most lending platforms you often don’t know what you’re buying.” And while others merely act as brokers, EDS offers much more: it selects suitable loans and takes care of the handling, making sure that the loans are flawless from a regulatory point of view. “The bank balance sheets have already been checked,” Bergmann explains.
There are also advantages for the banks involved. They can avoid cluster risks, streamline their balance sheets and create space for new loans. “It really is a win-win situation,” says Bergmann. In the process, mainly loans issued after September 2022 are taken into the portfolio: “Loans from before then are only interesting for investors if they have variable interest rates,” says Bergmann. Currently, there are about a dozen loan tranches to choose from, and some new ones will be added in the coming weeks.