In advance of the event, Delano spoke with Christian Hertz, managing director and general counsel at LIS | Sanne. He moderates the “Putting capital to work in infrastructure” panel on Wednesday 27 November at 3:50pm.
Aaron Grunwald: What do you want the audience to get most from the “Putting capital to work in infrastructure” panel?
Christian Hertz: Infrastructure funds serve two main purposes.
They are an ideal alternative to money market funds for investors looking for long term regular revenues, especially in the context of low interest rates.
They supplement public money in the financing of infrastructures - investment opportunities are therefore meant to continue to increase if we want to meet the Sustainable Development Goals set by the United Nations with 2030 as target date.
What types of investors are most attracted to Luxembourg-based infrastructure funds, and why?
Massive amounts of public money have been injected in blockbuster infrastructure funds in order to attract private money alongside public money. This will continue.
Pension funds and other institutional investors looking for safe and regular revenues invest in infrastructure funds to diversify their portfolio and boost revenues.
Retail investors are not present enough in infrastructure. The European Union tried to foster this by adopting the ELTIF regime back in 2015. Despite some upgrades in the meantime, this regime has largely been a missed opportunity, because it is too complex and too cumbersome. This needs to be fixed because exposure to infrastructure is a must for retail investors pursuing a long term view.
What steps would you like to see taken, either by the industry, government leaders or regulators, to further grow the sector?
Governments need to turn words into action when it comes to sustainable finance. Infrastructure funds which contribute to the SDGs should be given incentives, e.g., easier access to retail investors, softer regulatory obligations, preferential tax treatment, etc.
Aside from your own talk at the Alfi event, which speech or panel are you most looking forward to hearing, and why?
“PE for the greater good” [editor’s note: Tuesday 26 November at 4:15pm] seems particularly interesting to me. Many myths and aspirations fly around the integration of ESG considerations into investment funds, but reality remains often quite disappointing. I think this panel can give us true and practical examples on how to address sustainability in a PE context, beyond principles.