The asset management arm of insurer Munich Re, German pension fund Ärzteversorgung Westfalen-Lippe (ÄVWL) and Primevest Capital Partners (CP) have set up a company to deploy fibre-optic networks in Germany.

MEAG and ÄVWL are each expected to hold a 40% stake in the newly created fibre-to-the-home (FTTH) venture known as Open German Fiber, with Primevest CP owning the remaining 20% interest.

MEAG’s investment is being made on behalf of entities of Munich Re and MEAG European Infrastructure One and its infrastructure equity fund.

The trio said Open German Fiber, which operates with anchor internet service providers (ISPs), has already secured selected areas in Hessen and North Rhine-Westphalia to deploy FTTH.

Primevest CP has been appointed as the new company’s asset manager and will coordinate investment plans.

Primevest CP said it already has a presence in the same regions and partnered with the same ISPs through investments in its first Primevest Communication Infrastructure Fund (PCIF).

Bas van Dongen, the head of communication infrastructure at Primevest Capital Partners, said: “As first-mover in this asset class with a strategy focused on investing in passive communication infrastructure assets with long-term leases with internet service providers, we now see that this investment model is increasingly adopted by the industry.”

Primevest CP said PCIF II, a second fund, has already started to raise equity and will soon be launched. PCIF II is expected to participate in the current venture with MEAG and ÄVWL.

Dominik Damaschke, the head of infrastructure equity at MEAG, said: “We are very pleased to have teamed up with Primevest CP and ÄVWL on this investment to build a successful long-term relationship.

“In addition, I am particularly pleased that – with Open German Fiber – we have generated the first investment for our recently launched infrastructure equity fund MEAG European Infrastructure One. Ongoing digitalisation leads to increasing data volumes and FTTH is the only technology that is able to cope with the required higher volume of data throughput.

“We see a huge market potential for the FTTH market in Germany. Despite its position as Europe’s largest economy, Germany significantly lags behind in FTTH coverage.

Markus Altenhoff, CIO at ÄVWL, said the Covid-19 pandemic – with its far-reaching protective measures to avoid contact – has shown how important a resilient digital infrastructure is. Only once this is in place can home office, homeschooling and the like be guaranteed.

”With this investment, ÄVWL is proud to be able to support the nationwide expansion of the fibre-optics network in Germany. At the same time, by investing in a future-oriented and system-relevant business model, ÄVWL is adding another investment of stable cash flows and an attractive risk/return profile to its infrastructure portfolio.”

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