Let's Chat with Frank Dornseifer, CEO of the German Association for Alternative Investments
private financing for infrastructure's future: The German Association for Alternative Investments' vision
"Infrastructure projects should be combined for significance"
To pull in more private funds to fuel infrastructure investments, alongside public funds, the German Association for Alternative Investments advocates the idea of bringing projects together and amplifying them on a platform.
fed Frankfurt
The new federal government is prepared to dump a chunk of funds into infrastructure investments. Simultaneously, they're aiming to bring private capital on board to tackle the daunting financing obligations. As per the alternative investment industry in Germany, clumping projects on a platform and some regulatory adjustments could serve as a helpful catalyst for this.
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By Detlef Fechtner, Frankfurt
While the BAI (German Association for Alternative Investments) hasn't explicitly detailed their strategy for mobilizing private capital, their recent interest in impact investing in infrastructure and broader context suggest the following approaches:
Proposed Solutions:
- Bundling Projects:
- Collecting multiple smaller projects into a better, more attractive investment opportunity by pooling together several smaller projects, thus offering investors a more balanced risk profile.
- Scaling Projects:
- Expanding successful existing projects or initiating larger, more complicated projects that need heavy investing. This could involve partnering with multiple stakeholders, encompassing private investors and public entities, to guarantee the financial robustness of the projects.
- Platform Development:
- Establishing a platform where these bundled and scaled projects can be presented, overseen, and invested in. A robust platform would necessitate a structured approach for project selection, risk assessment, and investment allocation, backed by high-quality data analytics and reporting tools to evaluate project performance and investor returns.
- Impact Investing Strategies:
- Fusing impact investing strategies into infrastructure projects can attract socially aware investors, as it encourages financial returns coupled with environmental and social benefits.
- Collaboration and Partnerships:
- Collaborating with various stakeholders, ranging from fellow investment firms to government agencies and industry experts, can contribute to constructing a resilient and sustainable platform. This collaboration helps ensure that projects align with broader economic goals and sustainability objectives.
Overall, while the BAI's precise proposal remains unclear, the strategy they're likely considering entails pooling smaller projects, scaling them up, creating a platform, integrating impact investing, and forging collaborative partnerships to drive private capital into infrastructure investments.
In relation to the German Association for Alternative Investments' vision for private financing in infrastructure, the suggested approach to attract more private funds could involve pooling smaller projects together to create larger and attractive investment opportunities, scaling up successful projects with heavy investing, developing a platform for project presentation, capitalizing on impact investing strategies, and establishing collaborative partnerships with various stakeholders. Additionally, the new federal government's aim to bring private capital into infrastructure investments may benefit from the alternative investment industry's recommendations of clumping projects on a platform and some regulatory adjustments.
