Infrastructure investors and advisors gather for GIIA Annual Seminar

The 3rd GIIA Annual Seminar, sponsored by Ashurst, KPMG and Marsh, was held on Tuesday 18th February in London and focused on the emerging opportunities and risks for infrastructure investors in the UK and Europe under the theme ‘The Fog is Lifting.’

Simon Jack, the BBC News Business Editor, launched the afternoon seminar with his keynote address which touched on broad themes including Brexit, net zero carbon targets and the need for big business to improve its image. Highlighting the lingering uncertainty over Brexit, he predicted that fog would not truly lift until the end of the UK transition period at the end of 2020 – and a potential ‘Australian style’ no-deal Brexit.

Following on, James Stewart, Global Head of Infrastructure Practice at KPMG, chaired a panel on the topic of ‘Opportunities for infrastructure investors post-Brexit.’ Joining him on the panel were Ed Clarke, Co-Founder & Managing Director, Infracapital, Steven Pugh, Principal, Hermes, and Simon Jack, Editor, BBC Business. In a wide ranging discussion, the panel considered how underlying public discontent with aspects of the infrastructure sector, the ongoing uncertainty over Brexit and more aggressive regulation in the utility sector had combined to create a less attractive investment environment in the UK in recent years. The panel agreed that whilst the threat of nationalisation had receded in the short term, there remained an important task for the sector to earn its social licence to operate.

Blair Chalmers, Director at Marsh & McLennan Advantage Insights, then took to the stage to launch a new interactive online tool for infrastructure investors, developed in association with GIIA, which outlines the complex landscape of interconnected global risks facing the infrastructure sector. He also outlined how shareholder expectations are changing in response to the climate challenge and how investors need to develop profit-sustainability synergies.

Kay Swinburne, former MEP and current Vice Chair of Financial Services at KPMG, moderated an all-female panel titled ‘Unpacking the EU Green Deal: What does it mean for infrastructure investors.’ The panel, comprised of Anna-Marie Slot, Global Sustainability Partner, Ashurst; Anna Davreux, Senior Vice President of Financial Services at FleishmanHillard, and Elena Giannakopoulou, Vice President of Strategy & Partnerships at John Laing Group, discussed the politics driving the EU Green Deal and how those policies could be influenced by investors through increased engagement and consultations.

The seminar concluded with a fireside chat between Jonathan Oxley, the CEO of UK Regulators Network, and Michael Burns, a Partner at Ashurst. In an intriguing discussion, Oxley discussed the importance of independent regulation, and the need to the rebuild trust between the regulators, investors and the customer. The discussion focussed on the need to make the UK an attractive place to invest but also the need for asset owners to meet society’s requirements on responsible stewardship.

GIIA and Marsh & McLennan launch Global Risks for Infrastructure Map

Against a backdrop of continued macroeconomic uncertainty, societal instability, weaponized cyber capabilities, acute environmental threats and geopolitical frictions, infrastructure investors will need to be adaptable to ensure the longevity and security of their assets.

View the Global Risks for Infrastructure Map 

The 2020 Global Risks for Infrastructure Map, produced by Marsh & McLennan Advantage Insights in partnership with GIIA, provides some guidance for investors looking to navigate the choppy waters ahead. The Map provides investors with a view of the key risks and includes a curation of case studies evaluating ways in which these risks have affected infrastructure assets in recent years.

In the coming months, Marsh & McLennan Advantage Insights and GIIA will also release in-depth reports on two crucial global risks facing the infrastructure sector: climate change, and the emergence of transformative technologies.

The first, Global Risks for Infrastructure: The Climate Challenge takes a closer look at the impact of climate-induced physical and transition risks on the infrastructure sector, and will outline viable mitigation solutions and strategic opportunities for investors.

While the second report, Global Risks for Infrastructure: Transformative Technologies, provides a focused overview of the ways in which transformative technologies are changing the infrastructure sector, and provide frameworks that investors can consider for future-proofing their assets.

Stay up to date with the latest news from GIIA by following us on Twitter and LinkedIn.

Government engagement in UK and Brussels

With the recently re-elected Boris Johnson Government in the UK and the new Commission in Europe both looking to address the delivery of infrastructure early in their respective terms, it has been a busy start to 2020 for GIIA.

Ahead of the March Budget, GIIA has written to Chancellor Sajid Javid welcoming his promise of an ‘infrastructure revolution’ as well as the Government’s acknowledgement of the vital role private capital will play in delivering the country’s £600bn infrastructure pipeline to 2050.  We have called for enhanced dialogue with the private sector over the funding models envisaged to achieve the UK’s infrastructure aspirations, not least in relation to the Net Zero commitments which promises to have profound impacts on the wider economy.

January also saw GIIA in Brussels to meet with senior representatives from the European Commission including from President von der Leyen’s Cabinet, where coordination of the EU Green Deal will take place, and Commissioner Gentolini’s Cabinet which has responsibility for the InvestEU programme and the Sustainable Europe Investment Plan. GIIA intends to play a prominent role in facilitating discussions on the delivery mechanisms for the recently announced  EU Green Deal and in particular the opportunities available to private investors. We look forward to discussing these and other opportunities with member companies at our annual seminar in February.

As always, members who wish to share their views and participate in any of GIIA’s workstreams are encouraged to get in touch.

GIIA Members’ Assets Grow to $660bn

Analysis compiled by Associate Member EY, working with GIIA, reveals significant growth in members’ assets under management – rising from $500bn in 17/18 to more than $660bn – with 1,300 assets spanning 49 countries across 6 continents.

Globally, GIIA members’ assets provide the essential infrastructure needed by hundreds of millions of people every day – including utilities, energy, transport, telecommunications and social infrastructure.

Of particular note, members made significant investments in renewable energies increasing capacity to 48,000MW of wind power (up 16,300MW), 33,000MW of solar (up 20,300MW) and 14,800MW of hydro and biomass (up 7,300MW) since 17/18.

Based on responses by members, the findings show that for every £100bn of AUM, members will invest an additional £96.7bn in capex over the next five years – an increase of almost 20% since 17/18.

Click here to view the GIIA 2018/19 Global Asset Database

GIIA responds to NIC’s call for evidence

GIIA, has responded on behalf of members to the National Infrastructure Commission’s Call for Evidence for their review, called The Future of Regulation Study.

The submission was a result of extensive consultations with GIIA members who collectively own and operate more than $660bn of infrastructure assets globally, with the largest single country allocation being the UK.

Director of Policy and Research Piers Thompson said:

“Economic regulation of water, energy and telecoms in the UK has facilitated the investment that has delivered world class infrastructure with improved outcomes for consumers, at low cost.”

“These sectors can continue to attract investment and deliver positive outcomes for consumers and the environment if objectivity, transparency and predictability continue to be core to the regulatory model.”

Read GIIA’s full submission here

GIIA is grateful to Allen & Overy for their assistance with this important submission on behalf of the sector.