Swiss Re to invest USD 500 million in infrastructure debt through Macquarie platform
28 November 2012, Zurich
- Commitment to invest USD 500 million into infrastructure debt in order to match long-term liabilities with long-term assets
- Macquarie awarded external mandate to manage investment
Swiss Re announces today that it will engage in long-term financing of infrastructure businesses and assets. For this purpose it has committed an initial USD 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.”
Notes to editors
The Swiss Re Group is a leading wholesale provider of reinsurance, insurance and other insurance-based forms of risk transfer. Dealing direct and working through brokers, its global client base consists of insurance companies, mid-to-large-sized corporations and public sector clients. From standard products to tailor-made coverage across all lines of business, Swiss Re deploys its capital strength, expertise and innovation power to enable the risk-taking upon which enterprise and progress in society depend. Founded in Zurich, Switzerland, in 1863, Swiss Re serves clients through a network of over 60 offices globally and is rated "AA-" by Standard & Poor's, "A1" by Moody's and "A+" by A.M. Best. Registered shares in the Swiss Re Group holding company, Swiss Re Ltd, are listed on the SIX Swiss Exchange and trade under the symbol SREN. For more information about Swiss Re Group, please visit: www.swissre.com or follow us on Twitter @SwissRe.
Macquarie Group is a leading provider of banking, financial, advisory, investment and funds management services. Our global operations include offices in the world's major financial centres. Founded in 1969, Macquarie employs more than 13,400 people in 28 countries.
Macquarie Infrastructure Debt Investment Solutions (MIDIS) is part of the Macquarie Funds Group, a global asset management business with over €272billion of assets under management. MIDIS offers infrastructure debt investment opportunities to institutional investors such as pension funds and insurers seeking exposure to high-quality, long-term infrastructure debt at attractive yields.
All figures as at 30 September 2012.
Cautionary note on forward-looking statements
Certain statements and illustrations contained herein are forward-looking. These statements and illustrations provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to a historical fact or current fact.
Forward-looking statements typically are identified by words or phrases such as “anticipate“, “assume“, “believe“, “continue“, “estimate“, “expect“, “foresee“, “intend“, “may increase“ and “may fluctuate“ and similar expressions or by future or conditional verbs such as “will“, “should“, “would“ and “could“. These forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause Swiss Re’s actual results of operations, financial condition, solvency ratios, liquidity position or prospects to be materially different from any future results of operations, financial condition, solvency ratios, liquidity position or prospects expressed or implied by such statements. Such factors include, among others:
- further instability affecting the global financial system and developments related thereto, including as a result of concerns over, or adverse developments relating to, sovereign debt of euro area countries;
- further deterioration in global economic conditions;
- Swiss Re’s ability to maintain sufficient liquidity and access to capital markets, including sufficient liquidity to cover potential recapture of reinsurance agreements, early calls of debt or debt-like arrangements and collateral calls due to actual or perceived deterioration of Swiss Re’s financial strength or otherwise;
- the effect of market conditions, including the global equity and credit markets, and the level and volatility of equity prices, interest rates, credit spreads, currency values and other market indices, on Swiss Re’s investment assets;
- changes in Swiss Re’s investment result as a result of changes in its investment policy or the changed composition of its investment assets, and the impact of the timing of any such changes relative to changes in market conditions;
- uncertainties in valuing credit default swaps and other credit-related instruments;
- possible inability to realise amounts on sales of securities on Swiss Re’s balance sheet equivalent to their mark-to-market values recorded for accounting purposes;
- the outcome of tax audits, the ability to realise tax loss carryforwards and the ability to realise deferred tax assets (including by reason of the mix of earnings in a jurisdiction or deemed change of control), which could negatively impact future earnings;
- the possibility that Swiss Re’s hedging arrangements may not be effective;
- the lowering or loss of financial strength or other ratings of Swiss Re companies, and developments adversely affecting Swiss Re’s ability to achieve improved ratings;
- the cyclicality of the reinsurance industry;
- uncertainties in estimating reserves;
- uncertainties in estimating future claims for purposes of financial reporting, particularly with respect to large natural catastrophes, as significant uncertainties may be involved in estimating losses from such events and preliminary estimates may be subject to change as new information becomes available;
- the frequency, severity and development of insured claim events;
- acts of terrorism and acts of war;
- mortality, morbidity and longevity experience;
- policy renewal and lapse rates;
- extraordinary events affecting Swiss Re’s clients and other counterparties, such as bankruptcies, liquidations and other credit-related events;
- current, pending and future legislation and regulation affecting Swiss Re or its ceding companies;
- legal actions or regulatory investigations or actions, including those in respect of industry requirements or business conduct rules of general applicability;
- changes in accounting standards;
- significant investments, acquisitions or dispositions, and any delays, unexpected costs or other issues experienced in connection with any such transactions;
- changing levels of competition; and
- operational factors, including the efficacy of risk management and other internal procedures in managing the foregoing risks.
These factors are not exhaustive. Swiss Re operates in a continually changing environment and new risks emerge continually. Readers are cautioned not to place undue reliance on forward-looking statements. Swiss Re undertakes no obligation to publicly revise or update any forward-looking statements, whether as a result of new information, future events or otherwise.
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