The Next Year in Infrastructure A CEO's View

Well, Tobius, that's a very energizing uh presentation we just heard, but I guess on that uh optimistic note of what is required in terms of infrastructure, can you tell us a little about about Alian here in the region and what are the opportunities you're seeing to invest in infrastructure here?

Absolutely and thank you for having me, especially also to the ADG. I mean, if I do not move my head, this is not because I'm German and I'm a robot. I figured out yesterday that the mics don't work properly if I don't speak like this. So, please accept my apologies in advance. So, look, we we have been serving the region now for more than three decades, four decades already in a flyin, fly out approach and and we serve our clients in more than 25 countries with more than 30 offices around the globe.

And there was one missing piece and the growth of ADGM shows it right in 2023 ADGM grow the asset base by 35% and in 2024 by 245. So this is the place to be. We had to decide between Dubai and Abu Dhabi. I learned early on Dubai is party. Abu Dhabi is hard at work.

So that's the reason why our team sits here. I apologize. So they can party over the weekend. It's not far away. But we are here really um choking aside to serve our clients better.

So this is our hub now for the GCC. This is where we start with the team. We'll also bring in investors very soon. So Q1 we're going to place couple of infrastructure guys here on the ground and hopefully also can serve the region with our knowledge much better.

Yeah. And are you know the demographics the uh the regulatory framework is this is what kind of drawing you here. You see you see this uh runway coming through.

Okay. We only have 11 minutes left. Muhammad, and if you talk about regulatory experiences as a CEO, you you deal with any and everything, but I have to say kudos and really a big shout out to the ADGMC here. Also to the regulator, very pragmatic and I think Europe is not doing itself a favor right now where we stand, right? It's still um a a monetary union more than a political union.

There are too many voices. You see this if you think about ESG, right? you you talk to the French regulator AMF tells you oh to BS you have to give a guarantee you to speak to the German buff and they say yeah that's quite okay this way say we don't like both so it's it's really a safe place for a very open discussion you get very good and instant feedback and I think this is also part of the sex story of ADGM right now

okay so as an asset class right infrastructure in this region has been historically dominated by the public sector they come out they allocate they build they kind of own that seems to be changing somewhat. Is there what where is the role that you're finding for uh for more private capital to come in?

Look from private capital perspective and and we we manage more than 700 billion US dollars under the hood of Alian school investors both public and private and the private piece is around 120. So the new numbers are coming out. It's even a little bit bigger. We managed the money for most probably one of the most successful financial companies on this planet called Alans. and we are very proud to be part of it and we have a huge expertise more than 100 years in infrastructure.

We have a huge um capital also in the middle market lending piece which was back then called corporate loans and um we do pretty much everything but we do focus very much on infrastructure debt and on the equity side and on the private credit side we focus very much on yeah loans on the one middle ending but also secondaries and PE. This is what we do. We don't do real estate. We're not good in that. So, you need to choose your fights wisely.

And this is where we focus and really bring a lot of expertise to the table.

And how much can you give us an idea of like how much you've deployed here in the region or at least the the growth of it.

The 10 no it's 8% of our asset base is based here in the Middle East.

And we really you see this when you think about the trillions in the region. This is not now a European coming in after the US already had been here and saying oh give me all your money and then we fly out again. I think the expertise and the uniqueness is also if you have an insurance company as a parent we have this the different risk appetite on the one hand side you can say maybe the boring is the new sexy but we are very long-term oriented right so why we got into infrastructure 20 years ago was very much it is a perfect duration match to our life

book right so on the longevity side we do sometimes swap mortality with longevity but still Our duration, our longest duration we have on the book is 77 years.

77 years.

77.

Yeah. Yeah. That's a Well, that's the longest.

We have to be here for the Abu Dhabi Finance Week. Uh this has been the 82nd edition.

I hope I make it. Um so we made it less than halfway through and we have to talk about AI obviously and data centers. So this is the the super theme that's been emerging uh tens of billions probably hundreds of billions of dollars that are going to be deployed uh if their visions are are successful. Where where do you how do you get a slice of this? Where what what are you looking at?

Look we had super panels already up here speaking about data centers and what I sometimes tend to say look are you talking about data centers and you can compare this sometimes with military barracks. Don't be put me in the metals. Is this now from a real estate perspective or is it just ground plant and then you um put a data storage in? Yes, we do it but we focus much more on the energy side. We have heard this I think the energy demand right three trillion two trillion out of this is pretty much clean energy.

We have been one of the first investors in Europe 20 years ago. Solar turbine we just recently launched one of the first green hydrogen mills in in Norway. So we also think about the energy transition going forward because a lot of people still forget you needed to deploy that one big data center 800 gab.

Yeah. And the problem is it's really cool that everybody loves AI and everybody wants to have a data center but they sometimes forget you better be close on the energy piece right if it's water if it's wind solar yes absolutely nuclear is in the mix too not for us but for others and there we really bring in a lot of scale and a lot of expertise already as we are one of the bigger energy transition fund managers in Europe.

Yeah. So, so you want to go on the on the power side rather than uh you know really like on the tokens or

absolutely the data center and the data storage place is so crowded and I'm more than happy if they become lucky clients of ours if they need energy.

Got it. Um crystal ball time our our session is titled 2026 which is in you know three weeks. So what do we where do you where do you allocate in three weeks? I think you already know but let's let's hear what what are the big themes for next year?

Yeah. the on the credit side. Look, we remain very cautious on on on the public listed side. Look, we will see um I think certain volatility and that also is very much driven by geopolitics by the tensions and I'm not going down the road because I can give you the full monty. I truly believe for example that AI and technology is not a bubble at all because the demand is still not there where the supply is and the other way around.

So there is still a gap to be brided. So that means there is bigger demand than supply. So that means by by default it can't be a bubble. Other than that on the on the infrastructure side we very much focus really on energy and energy transition. There's a huge demand.

If you think about Europe per se it's an 800 billion grid play per year over the next five years

to update and to innovate our our grids and from the north to south and west to east. And if you look into US it's pretty much the same challenge. So if you look into the opportunities you have in that credit place both that and equity we feel very well placed there. Um and there's also a huge demand to partner up with development banks the the supply of money is there. Yeah.

But the demand is so much bigger and it needs and yells for public private partnerships. We do this with KFW. We do it with EIB. We do it with foundations. They provide guarantees on blended finance.

somebody else is taking the loss leader piece. We come in with very innovative structure taking seniors place and our capital raise and our deployment is on average two times better than the market average.

Okay. If we switch back just to the to the region itself, you know, when we call we call it as a bucket Middle East, we could call it the Gulf, but they're obviously very different countries. Uh each one has uh well in the Gulf for the most part mostly stable governments, but still different different risk uh risk factors. What do what do you look at when you're assessing it? you know are you really looking Gulf or even like you know the three the you know three plus three UAE Saudi Arabia Qatar then the other three how how does that alian

we have chosen UAE because to a certain extent and and now this is really a a very tough questions for a European to answer but our perspective is this is very much like Singapore right it's perceived as neutral in the GCC in the broader region within one and a half hour you can reach every country in the region which is important to us and of course we we need to sweep the the stairs from the top to the bottom. We do start here absolutely we do business with all sovereign wealth funds in the region. We do cover clients via distribution partnerships on the banking side. We do high net worth. We have a huge insurance business in the region on the health side.

We want to come in also for uh for the end of service um liabilities. So we can really bring a lot to the table. We don't want to push products only see Alian more holistically what we can bring to the table as being one of the largest uh provider for DB and DC schemes globally and also having a huge expertise on the asset management side and the beauty also is if you invest with Alian's global investors you always have an aligned interest between one of the largest financial conglomerates called Alian SE because they always invest with us and alongside us so there's always aligned interest we don't come to you or this is the greatest invention ever. We always have skin in the game.

One thing you mentioned right now is just the this end of service uh aspect and and you know people who are from the region in the audience or from from the UAE uh know that a lot of you know all the companies basically are sitting on these uh you know cash accounts under books and and figuring out how to fund them when people leave. Uh but that is now opening up. So what do you look at in terms of size of opportunity? what what can be uh what can be offset from companies to

look it's early on because it's always a question how you create such a DC plan if you do this via my an occupational pension if you do this mandatory and I don't I don't want to stop with the end of service only I mean as an expert you also have to have proper health coverage globally so for example Alyan's group is one of the biggest as providers if you travel we give you a guarantee within 24 hours, we find you the best treatment, the best hospital at the best price.

So, and this is that peace of mind we want to generate at Alian at Alian Global Investors. So, it's more broadly um that we can bring I think a lot of expertise to the region.

Yeah. But but on on that fact, are are you looking at um providing that that product in the region or do you have like partners?

We're coming in with a fullyfledged solution.

Yeah. Okay. Soon, I guess. Yeah.

Okay. We don't want to we don't need to break.

Don't start the rumoring now, right? No need to break news on that here today. But um you know so when when you when you look at again at the region like these these products right so if if if somebody wanted to get on a more individual level into into infrastructure into that sort of stuff are are these products being being distributed in in in the Gulf right now or how how do you how do you get that

this is the beauty being in ADGM I'm pretty sure you can have a a very robust frank and transparent discussion what we need as a vehicle in Europe and in Asia we already do this with EliveF with evergreens so there are structures available which will allow retail investors to go into. We need to manage liquidity which is for us as we have an own balance sheet and on a life insurance book it's much easier than maybe other providers but um you will be surprised positively I hope when we go live.

All right well thank you thank you so much to that's all I have today. Thank you from the audience for listening to me. Thank you.