New white paper highlights expanding role for captive financing institutions
* Liquidity for infrastructure investments remains scarce in Europe
* Institutional investors are identifying infrastructure as an attractive asset class
* Corporates contribute to the financing of projects
* Value creation through adding financial logic to technological leadership
Munich, Germany - In a white paper released today, the Financial Services unit of Siemens (SFS) has outlined the major changes taking place in today’s project and equipment financing landscape: setting out the case for companies to take a more active financing role. One example is an expanded role for captive financing institutions such as SFS, which can create value for their parent companies, as well as their customers.
The white paper has been conceived against the growing demand of Siemens’ customers for financing. Bank liquidity remains constrained in Europe and political frameworks are changing – causing a bottleneck in infrastructure investments. In response, banks are accelerating the trend towards an “originator-distributor” model, utilizing their structuring expertise rather than lending and holding. On the other hand, there is a growing appetite among institutional investors – as well as specialist lending entities – to invest in technology or infrastructure projects, thanks to the attractive risk-return profile they offer
However, investors are faced with existing challenges and barriers to entry. The market lacks suitable investment products, and risk awareness has increased among all market participants. It is here where SFS and other captives can act as a catalyst – not only by offering capital solutions, but by giving the opportunity to create value by supporting the technological leadership of their industrial parents with financial logic. They can act as a financial stakeholder in the technology of the parent company – signalling confidence to other investors. But the role of captives can go even further in establishing entirely new and tailor-made business models, such as managed services, that lead to new ownership experiences for customers.
“Our aim is not to replace the banks in their vital funding role, but to collaborate with all market participants in order to provide innovative financing solutions,” said Roland Chalons-Browne, CEO of SFS. “SFS’s role is not just about financing. A key need is to act as a catalyst to make the deal happen. Based on new and cautiously tailored models of risk sharing between banks, investors and captives we can inject confidence to projects in volatile economic times – to the benefit of all stakeholders.”
The white paper named “Making the Difference” was prepared through a series of interviews with key SFS management team executives who were encouraged to offer their personal insights into the current and future trends of the financing sector, as well as of Siemens as a whole. The paper includes a series of quotes taken from the original interviews.
For further information on the SFS white paper, please see www.siemens.com/difference
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The Siemens Financial Services (SFS) is an international provider of business-to-business financial solutions. SFS helps facilitate investments, providing commercial finance, project and structured finance with specific asset expertise in the energy, healthcare, industry, and infrastructure & cities markets. Employing more than 2,900 employees worldwide, SFS supports Siemens as well as other companies with their capital needs and acts as an expert manager of financial risks within the Siemens Company. By leveraging our financing expertise and our industrial know-how we create value for our customers and help them strengthen their competitiveness. Beyond that, financing is key in creating trust for technological solutions – and acts as a key enabler when it comes to the market launch. As of September 30, 2012, the total assets amounted to €17.4 billion. For more information, visit: http://www.siemens.com/finance
Reference Number: SFS201303001e
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