Swiss Re to invest $500 mn in infrastructure debt

Swiss Re recently announced that it will engage in long-term financing of infrastructure businesses and assets. For this purpose it has committed an initial $500 million for investments in senior secured debt of infrastructure businesses and assets located primarily in northern Europe.

Institutional investment in infrastructure businesses and assets is expected to rapidly grow in importance as traditional sources of financing in the European infrastructure market, lending by states, governments and banks, are increasingly scarce.

Investments in infrastructure debt offer an alternative for long-term investments in other assets, such as government bonds where yields have been very low recently.

Klaus Weber, Managing Director and Head of External Investment Mandates of Swiss Re, said: “We expect the market to evolve substantially over the next few years and are excited to participate in this development. With its particular characteristics, infrastructure debt fits well with our asset and liability management approach and provides attractive long-term investments, well aligned with our balanced investment strategy.”

For sourcing and managing the investments, Swiss Re has awarded a mandate to Macquarie Group, an Australia-based global financial services provider, following a rigorous due diligence process. The mandate is the first to be launched by the new Macquarie Infrastructure Debt Investment Solutions (MIDIS) business platform. MIDIS will deliver infrastructure debt investment opportunities to long-term institutional investors, underpinned by Macquarie’s position as the world’s leading infrastructure specialist.

“We are delighted to work with Macquarie in what is an important initiative for us and are confident it will give us access to high quality assets and deliver favourable risk adjusted returns,” Weber commented.

James Wilson, Senior Managing Director and CEO of MIDIS, said: “The launch of the MIDIS platform will leverage Macquarie’s unrivalled global infrastructure expertise and relationships and provide long-term investors the opportunity to access stable and superior risk adjusted returns. It is an asset class which lends itself well to insurance companies and pension funds seeking robust long-dated assets to match their long-term liabilities. We are delighted to work together with Swiss Re to manage its infrastructure debt investment and we look forward to a successful partnership.”