Natixis, a key player in project and infrastructure finance, has developed a new model in this area
Infrastructure projects can no longer be financed through bank loans only. Economic and regulation changes have generated the need for new financing models. With its great expertise in traditional financing, Natixis now provides new solutions that match the financing requirements of companies with those of institutional investors.
The “Infrastructure” asset class, a perfect alternative to bank loan financing
Until 2008, most infrastructure projects in Europe were financed via bank loans.
Due to the economic crisis, regulation changes and a smaller number of players in the market, the situation has changed.
As a result of the strong increase of investments in new infrastructures in Europe – estimated at between €1,500 and €1,800 billion between 2012 and 2020 – it appeared essential to develop the use of private financing.
At the same time, because of the sovereign debt crisis, institutional investors (insurance companies, retirement funds, etc.) felt a need to diversify their assets. The “Infrastructure” asset class provides a perfect alternative because of the low correlation with economic cycles and long-term placement horizons.
An Infrastructure and Projects platform combining financial advisory, arrangement and services
Natixis is present in Canada, where most infrastructures are already directly financed via project bonds subscribed by life insurance companies.
In Europe, Natixis has created a platform dedicated to infrastructures which provides clients with financing solutions tailored to their projects and is building partnerships with first-rank investors. The first of these partnerships was signed with the Belgian Ageas, one of the 20 top insurance companies in Europe. By virtue of this agreement, Ageas will invest in infrastructure loans originated by Natixis that meet specific criteria, with Natixis keeping a pre-determined portion of each loan. As a result, it will build a €2 billion portfolio, monitored by Natixis.
Successful first European Infrastructure Day
As a major player in project and infrastructure financing, Natixis organized its first “European Infrastructure Day” on October 23 in Paris. The conference attracted numerous institutional investors around experts presenting the new “Infrastructure” asset class, its specifics, its pluses and its prospects.
Natixis also explained the impact of new regulations constraints for insurance companies related to these emerging alternative financing solutions.
In addition, Natixis mentioned the partnership with Edhec Risk Institute to create a research chair on the investment and governance characteristics of Infrastructure loan instruments.
These initiatives confirm Natixis’ tireless search for solutions to better serve its clients and shows its capability for innovation in a deeply changing market and regulatory environment.