March 2020 – Three questions to Inka Klinger, Head of Global Infrastructure at Hamburg Commercial Bank
Ms. Klinger, infrastructure projects have been favored by institutional investors for some time. Does this still apply in the coronavirus era?
Inka Klinger: According to our analysis, infrastructure projects will remain an attractive investment area for a long time to come. The obvious catchup requirement and the need for modernization is too great in many public and semi-public sectors. However, tremendous shifts are currently taking place in the market. This was already the case before the coronavirus, but it will now be accelerated by the pandemic and its consequences. We expect especially dynamic developments in previously less well-known niches for the economy and as a result also for us as special financiers.
What exactly do you mean by this?
Inka Klinger:As a special financier, we concentrate on niches where we can offer added value. The trend for sustainability is completely unmistakable. We are looking for sustainable investments in our focus segments. These are digital infrastructure, rail, storage, district energy as well as modern installations for the resource-saving and efficient handling of (sewage) water or waste. All of these assets classes constitute future topics and mega-trends. For this purpose, you need years of specialist knowledge as a financier – and we can legitimately claim to have it. Regulatory adjustments are playing into our hands in this respect: SMEs and corporations are voluntarily subjecting themselves to increasingly strict ESG rules and are also being supervised more and more by lawmakers. For example, in future, sludge residues may no longer be spread on the land in Germany. This has resulted in the need to dry and incinerate sludge. This has created a new market – including for us as financiers.
Against the coronavirus backdrop, digitalization is currently the investment topic of the hour. How is Hamburg Commercial Bank set up here?
Inka Klinger:We have been following the subject of broadband for seven years and see ourselves as pioneers on this topic. Compared to the rest of Europe, Germany is at the lower end of the list regarding the expansion and penetration of high-performance networks and digital services. There is definitely a lot of potential here, but also numerous challenges, especially for regional providers who want to get more involved in this subject in future. On the one hand, broadband projects are very capital-intensive transactions with delayed income, which not every company wants to and can include on its own balance sheet. On the other hand, alongside the opportunities, there are also various risks and traps that have to be understood. Since we are deeply immersed in this market segment, we are in a good position to judge which concepts are successful and what is needed to implement them successfully.