Kategorie: English Articles

„Financial Centre North Rhine-Westphalia“, Financial Centre Frankfurt, Economy, Innovation, Germany Finance & Cooperation of Financial Centres – Markus Hill spoke for FINANZPLATZ-FRANKFURT-MAIN.DE about these topics with Heinz Joachim Plessentin, former coordinator of Fin.Connect.NRW at the Ministry of Economics of NRW. Further components of the discussion were additionally the areas of venture capital, ESG, and transformation as well as the contents of the study „Germany as a financial centre as a cornerstone of the European financial system“.

Hill: Fin.Connect.NRW has attracted attention beyond the state borders. Compared to other financial centres such as Frankfurt, the financial centre initiative is still relatively young. What are the special features, what is the unique selling point of Fin.Connect.NRW?

Plessentin: Indeed, the structures in North Rhine-Westphalia are special. The state has a rather decentralized organization with several major centres such as Düsseldorf, Cologne, and Münster. North Rhine-Westphalia is Germany’s second-largest banking center after Frankfurt, with a focus on Düsseldorf. Next to Munich, Cologne is the strongest insurance location. The state is an important location for industry, medium-sized businesses, and science. Accordingly, Fin.Connect.NRW is not a city-based initiative, but an overarching state initiative that brings together all the players. Fin.Connect.NRW is the financial centre initiative focusing on sustainable, climate-neutral, and digital transformation and its financing. We also have the classic financial center topics on the agenda: location marketing, human resources, innovation & fintech. For example, InsurLab Germany in Cologne is the largest industry initiative to promote digitization and innovation in the insurance industry.

Hill: For a financial center initiative, the ecosystem and networking are crucial. Networking is essentially based on contacts in the financial industry and the business sectors, personal trust, and mutual appreciation. Who is on board as a cooperation partner in Fin.Connect.NRW?

Plessentin: Fin.Connect.NRW will further expand NRW’s financial ecosystem, especially given the major economic challenge of transformation. The competitiveness and performance of a financial center and sustainable finance in the broader sense depend to a large extent on the performance of the ecosystem. We „span the arc“ from science to finance to the „real economy“. The real economy is represented by the NRW Chamber of Industry and Commerce, the credit industry associations, and the NRW headquarters of the Deutsche Bundesbank are also founding members. Furthermore, in addition to the insurance industry, the stock exchange, private equity companies, NRW.BANK, the Center for Innovation and Technology in North Rhine-Westphalia, or ZENIT for short, the Institute of German Business and the Institute of Energy Economics at the University of Cologne, bank and business professors, and consulting firms such as BCG and zeb are part of the initiative.

Hill: That’s impressive. Who is coordinating the initiative?

Plessentin: We see diversity as a strength. Fin.Connect.NRW is primarily about the topics. The structures are still developing. At present, coordination lies with the Ministry of Economic Affairs, SMEs, Climate Protection and Energy of the State of North Rhine-Westphalia, specifically with my colleague Dr. Dirk Schlotböller and myself in particular. In line with the Future Contract for North Rhine-Westphalia (coalition agreement), Fin.Connect.NRW is being strengthened. On June 14, 2023, the state parliament of North Rhine-Westphalia resolved to strengthen the Fin.Connect.NRW financial center initiative. Specifically, the state parliament has instructed the state government to strengthen the financial center initiative Fin.Connect.NRW and the networking between stakeholders such as companies, the credit industry, insurance companies as well as other players. On this platform, the players are to be able to offer tailor-made financing instruments for syndicated financing with several lenders and to mediate partners. A comprehensive information campaign is to be developed to raise awareness of Fin.Connect.NRW among the relevant target groups. The first NRW climate protection package adopted by the cabinet also includes strengthening Fin.Connect.NRW by awarding it an office, which will start work on November 1, 2023.

Hill: I would like to ask you to elaborate on the conceptual cornerstones. Is diversity a strength of the financial centre?

Plessentin: Yes, we are convinced of that. A study by Germany Finance and Zeb (study entitled „Germany as a financial center – a cornerstone of the European financial system“, in cooperation with the Chair of Banking and Financial Services at the University of Hohenheim, Prof. Burghof, on which I was involved) proves that diversity is an advantage and a strength of the financial system: The German financial centre is an excellent fit with the decentralized, medium-sized economic structure and German federalism. The structures of the economy and the banking sector are very similar. Our financial center consists of several leading regional financial centers with different focuses. This corresponds to the well-known structure of the German real economy, which is diverse, high-growth, international, and stable. New challenges have to be mastered. A diversified economy has a good chance of doing so. The sustainable transformation of the economy – the megatrend of the 21st century – and its financing require a departure and massive innovation, investment, and funding. To explain: Fin.Connect.NRW is a founding member of the Germany Finance working group, along with Frankfurt Main Finance, Finanzplatz Hamburg, Stuttgart Financial, and Finanzplatz München Initiative (with observer status); Berlin Finance Initiative was added. The participating organizations have thus initiated a joint platform to further promote continuous exchange among each other and to provide a central point of contact for people from Germany and abroad interested in Germany as a financial centre.

Hill: How does the cooperation at Germany Finance work? I ask this also against the background that I know and appreciate Frankfurt very well, come from NRW/Cologne, and know that cooperation between countries, financial centres, and organizations is often not that easy.

Plessentin: The cooperation at Germany Finance works well and collegially. This year, the spokesperson role is in Frankfurt, and 2024 it will be with Fin.Connect.NRW. As Germany Finance, we have achieved a lot together with studies on the financial centre, the fintech location, sustainable finance, and in the spring with the consultation on the attractiveness of the financial sector for young people. The cooperation also works well at Fin.Connect.NRW.

Hill: Experience, overarching expertise, and trust built up over the years are essential for coordinating a financial center initiative. My talks, as you know, are therefore about the cause and the people. You are an employee of the Ministry of Economics of North Rhine-Westphalia, were previously with DZ Bank, have dealt with corporate loans and equity financing, funding, and supervisory issues, and are also an author on these issues. What are your personal experiences and assessments?

Plessentin: In the Ministry of Economics of North Rhine-Westphalia, I am involved in the policy department, which deals with issues relating to the future. Coordination and development of Fin.Connect.NRW are therefore not my only task; I also deal with the fundamental issues of the capital and financial markets. My professional experience at renowned institutions (DZ Bank and KfW by today’s name) helps me in this. In addition, the experience I have gained from providing expert support in top-level meetings, in chairing working groups at the federal and state levels, with the departments in the preparation of development bank committees, and with the business community also helps. I have a degree in business administration and am considered a „veteran“ of the financial centre.

Hill: This has shed light on the framework conditions of Fin.Connect.NRW and your coordination, which are essential for understanding. The successes so far are impressive. Nevertheless, more resources and more flexibility are needed for this ambitious task in a scale-up phase. Now to the brand core. The focus of Fin.Connect.NRW is on transformation financing. What does that mean in concrete terms?

Plessentin: The Institute of the German Economy in Cologne has estimated the investment required for climate-neutral and digital transformation at 70 billion euros per year for NRW alone (IW report „Transformation in NRW. How can the digital and climate-neutral transformation of companies in NRW best be financed?“). Of this, climate-neutral transformation accounts for 50 billion euros. This includes both additional and replacement investments. From today’s perspective, the figure is more like 80 billion euros p.a. The majority will have to be financed privately. The banks cannot handle this alone; better use must also be made of the capital market. The challenge in transformation financing is often to better match capital supply and demand. The IW report outlines recommendations for action. The state government and Minister Neubaur have set the „Joint Project Climate-Neutral Industrial Region“ as their goal. North Rhine-Westphalia is to become the first climate-neutral industrial region in Europe and a pioneer on the road to climate neutrality. Fin.Connect.NRW is intended to bundle the forces for the transformation. Fin.Connect.NRW can initiate new solutions. The contribution of the financial sector and companies on this path to the future is of great importance.

Hill: Indeed, the challenges are great right now. Sustainability, climate neutrality, and digitalization are crucial for the financial industry and companies. Business models must be transformed, products and processes adapted, and ESG criteria given greater consideration. How can Fin.Connect.NRW, with its limited resources, contribute to this.

Plessentin: In the start-up phase of Fin.Connect.NRW, the IW’s report was important. It was commissioned jointly with the banking industry associations and quantified the investment and financing requirements for the transformation in NRW for the first time. The financial sector and companies would be well advised to take advantage of the opportunities presented by the transformation. A survey shows that larger companies have opportunities for their competitiveness „on their radar.“ For small and medium-sized enterprises, there is often a need for information. Fin.Connect.NRW, therefore, organizes solution-oriented events together with its cooperation partners to bring together different players across the board, raise awareness, provide practical information, and impart knowledge. The website and the quarterly newsletter also serve this purpose. We are pleased that these offerings are well received. In the future, it will be important to further intensify matching together with our partners to advance the financial center, the transformation of companies, and their financing.

Hill: You are often in Frankfurt. What do you appreciate about Frankfurt?

Plessentin: Frankfurt is the largest German banking center and is internationally positioned. The cooperation with colleagues is good and I get together to exchange ideas. And it’s only a stone’s throw from the Rhine to the Main.

Hill: Finally, a personal question: How long will you continue to coordinate Fin.Connect.NRW? Will you continue to contribute your diverse experience and expertise?

Plessentin: My term of service at the NRW Ministry of Economic Affairs ends on July 31, 2023, so I would like to take this opportunity to thank my colleagues and cooperation partners for their trust and constructive collaboration. I enjoy the topics, the network is pronounced and I have requests. Let’s have a look.

Hill: Great tasks, an interesting prospects and definitely inspiring. Thank you for the interview.

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Over four decades, H.-.Joachim Plessentin has provided important impetus and contributions to the economic policy development of the state of North Rhine-Westphalia in various capacities, contributing his expertise in an advisory and supportive capacity. He coordinated the financial center initiative Fin.Connect.NRW from June 15, 2020 to July 31, 2023, was a long-time employee of the NRW Ministry of Economics and previously a banker at DZ Bank and KfW (current designations), holds a degree in business administration and is an author. The interview was conducted in July 2023.

Links: www.fin-connect-nrw.de

Germany Finance (germany-finance.com)

Studien: IW-Gutachten „Transformation in NRW. Wie kann die digitale und klimaneutrale Transformation in NRW am besten finanziert werden?

Der Finanzplatz Deutschland als Eckstein des europäischen Finanzsystems

Photo: Pixabay – Photo: Plessentin/Hill ( Finanzplatz Frankfurt)

Europe in general and Germany, in particular, are not taking the easy way out when it comes to shaping a sustainable future. As generally accepted as the UN’s sustainability goals are, as much as the words Ecological – Social – Governance (ESG for short) are on everyone’s lips, the attitudes and actions on how these are to be achieved diverge.

In Germany in particular, there is an immense will to fulfill the goals set in all areas and in the best possible way – technical progress should be egalitarian, democratic, and in line with data protection; the energy turnaround should protect the environment without jeopardizing economic growth. We are trying to solve and overcome the conflicting goals and limits that we inevitably come up against with a great deal of (technical) expertise and even more capital investment.

In the area of digitization and its underlying infrastructure, the ambivalence becomes even clearer. On the one hand, this is a key building block for ESG: be it the replacement of the business trip by a virtual meeting, online access for educational purposes in the countryside, or information on the actions of public authorities freely available on the Internet – to name just three examples. On the other hand, digitization consumes large amounts of resources, be it electricity for data centers or rare-earth for batteries and devices. It also sets new hurdles in social and professional participation and is subject to criticism due to data collection and analysis, especially by (American) large corporations.

Unfortunately, the „solution“ to this tension often amounts to stagnation – regulatory requirements alienate investors, NIMBY (Not in my Backyard) protests prevent or delay critical projects, and processes are not digitized „for data protection reasons. The fact that this ultimately helps neither the climate nor society seems to be of secondary importance.

In Frankfurt, a city that has evolved from a banking capital to the data capital of the EU, the challenge is evident in practice: despite the unquestionable availability of capital, expertise, and infrastructure, the city on the Main is neither at the smart city level (Hamburg) nor among the top startups (Berlin/Rhein-Ruhr/Munich) in Germany, let alone in Europe. The city also struggles with its role as the (world’s largest) Internet hub and important data center location – difficult energy supply, unused waste heat, displaced businesses – to name just a few points of criticism.

The new governing coalition in the city parliament is striving to remedy the situation with a digitization strategy on the one hand and regulatory requirements on the other, and in doing so is taking the operators of the data centers to task, for example on the issue of waste heat. The new Telehouse Datacenter in Kleyerstraße is already a pilot project in which waste heat from the data center is to be used to heat a new development in cooperation with Mainova. However, this – very positive – example is not a one-size-fits-all solution, as the conditions at other locations are far less optimal, not to mention the cost-effectiveness of retrofitting existing infrastructures.

Frankfurt will therefore also have to face the challenge of developing holistic concepts in terms of digitization and digital infrastructure – based on sound data and involving not only the data centers but also a large number of other stakeholders from startups to hyperscaler’s (AWS, Google, Microsoft & Co). The fact that these stakeholders are located in Frankfurt and the entire Rhine-Main area in a geographically very confined yet internationally networked space is an important component here that brings both human and technical advantages. So while corporate servers exchange data with low latency and mainframes enable the use of artificial intelligence, human decision-makers and specialists can physically come together to find solutions.

No one believes that this topic will lose its complexity and importance in the next few years. On the contrary, against a backdrop of dwindling resources and advancing climate change, social inequality, and political tensions, we need digitization more than ever – for greater efficiency and social participation, learner administration, and faster processes in general. The fiber rollout that is finally in full swing, together with 5G and its possibilities to help existing approaches such as IoT, AI, M2M, etc. make a breakthrough, are important building blocks here, as are clouds and applications.

To summarize: Only when data centers and the applications running there are seen as part of a complex ecosystem, as part of social change and the energy transition, and significantly more players are involved, can the promise of „ESG – positive“ digitization be realized. Whether in Frankfurt, Germany, or Europe, this creates a historic opportunity to shape the digital transformation in a humane, climate-friendly, free, and democratic way.

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AUTHOR: Michael Jakobi, LL.M. is a consultant and project manager in the field of digital innovation & infrastructure at contagi Digital Impact Group – www.contagi.ch

Digitalization & “Asset Class Data Centers” – Real Estate, REITs and ESG (Michael Jakobi, contagi Digital Impact Group)

Photo: www.istock.com/jotily

“In a city like Frankfurt, one finds oneself in a peculiar situation; ever-crossing strangers point to all corners of the world and awaken a desire to travel” (Johann Wolfgang von Goethe). Vienna – Frankfurt – Vienna: Markus Hill spoke for FINANZPLATZ-FRANKFURT-MAIN.DE with Martin Friedrich, Lansdowne Partners Austria GmbH, about his private and professional impressions from 16 years in Frankfurt. Cosmopolitanism, investment banking, family office, fund management and schnitzel are some keywords of the exchange of ideas. (Event announcement SCOPE & FUND FORUM INTERNATIONAL – 8.6. & 16.6.2021).

Hill: Mr. Friedrich, you are Austrian and live in Vienna, but you also know Frankfurt very well. Where does that come from?

Friedrich: Well, I have spent most of my professional life in Frankfurt. I came to Germany in 2002 and worked in the Rhine/Main financial center for almost 16 years. During that time, the city has developed a lot. When my wife and I moved in in 2002, Germany was so badly affected by the international economic slump that it was considered the “sick man of Europe.” I also remember that it was practically impossible to buy anything on the weekend, as most shops closed Saturday around noon. Even many restaurants often were closed on Sundays.
Today, Frankfurt is a completely different city. It has become much more open to the world, we have made friends who really come from all over the world. Unfortunately, everything is closed at the moment, but before the lock-down I enjoyed taking part in life in Frankfurt and appreciated not only the opportunities for professional development, but also the sports and leisure activities on offer.

Hill: Why did you originally come to Frankfurt? What later drew you back home?

Friedrich: Before I came to Frankfurt, I had worked in London, for the U.S. investment bank Morgan Stanley. The immediate reason for my move was purely professional: at the time, it was decided that my occupation, looking after fund managers in Germany, could be better handled from Frankfurt. So I followed my job, literally. The situation was not unlike was is happening today due to Brexit, it just took place 20 years earlier.
Years later, upon leaving Morgan Stanley, I worked for a multi-family office in Bad Homburg, HQ Trust. Of course, I count the pleasant time I spent there as one of my Frankfurt years, especially since it was also, from a professional point of view, an excellent preparation for the move to Vienna. The primary motivation was, once again, professional: Lansdowne Partners Austria offered me the opportunity to launch my own fund based on the investment strategy I developed.

Hill: Where did you like to spend your time in Frankfurt the most? What are your fondest memories?

Friedrich: Three places come to mind: first, of course, we really enjoyed the range of good restaurants; sitting on the terrace of the old opera house on a beautiful summer evening, for example. We also often went to the Austrian restaurant on Weißadlergasse, Salzkammer – it’s just a stone’s throw from Goethe-Haus and serves excellent Austrian cuisine!
On weekends, we often hiked the Feldberg; as Austrians, we are automatically drawn to the mountains, it seems. I remember that once every winter, there was always a dog sled race around the Feldberg. I thought that was very nice.
Finally, I don’t want to hide the fact that I am a passionate golfer. And the Frankfurt Golf Club – which turned 100 years old in 2013 – is truly a jewel. Standing there on the 18th tee and enjoying the view of the skyline has always been something special for me.

Hill: Thank you very much for the interview.

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1. ScopeExplorer Manager Conferences
   “After the rally of the past 12 months, the focus of many investors is on equities. No doubt about it: equities belong in every multi-asset portfolio. But which asset classes still belong in it? And most importantly, how much of them? In an interview with André Haertel, multi-asset strategist and portfolio manager Martin Friedrich explains why the Lansdowne Endowment Fund invests in more than 15 other asset classes in addition to equities, and how return and risk aspects are balanced in the best possible way.” (QUOTE: Scope Group, Lansdowne Partners – ADDITIONAL INFORMATION: LINK)
2. Fund Forum International Virtual
   Alternative markets outlook in choppy waters – Macro updates, demands and megatrends: what can we expect from global and Europe’s alternative markets ahead of 2021? Economic shifts and key trends that could impact the industry and asset allocations. 
   Moderator: Martin Friedrich, Head of Economic and Market Research and Portfolio Manager, Lansdowne Partners, Austria  Randall Kroszner, Deputy Dean for Executive Programs and Norman R. Bobins Professor of Economics, The University of Chicago Booth School of Business 
   LINK: Fund Forum International Virtual – 16th June, CET 14:00 – 14:30)

Related posts:

• Financial Markets, Volatility & Speculation – Emerging Markets ante portas! (Martin Friedrich, Lansdowne Partners Austria GmbH)
• Inflation & Fiscal Policy– Simbabwe ante portas? (Martin Friedrich, Lansdowne Partners Austria GmbH)
• Behavioural Finance & Cat Bonds (Martin Friedrich, Lansdowne Partners Austria GmbH)
• Inflation, Asset Allocation, “SPACs & New Market” Zimbabwe (Interview – Martin Friedrich, Lansdowne Partners Austria GmbH)
• Family Offices, Cat Bonds, Fund Selection & “In Nature’s Casino” (Interview – Martin Friedrich, Lansdowne Partners Austria GmbH)

Foundations, asset management, fund primer & ESG, from portfolio manager to passive „portfolio controller“ – Markus Hill spoke for FINANCIAL CENTRE FRANKFURT with Tobias Karow, STIFTUNGSMARKTPLATZ.EU, about the current challenges for foundation managers in managing foundation assets. The importance of the founder’s will, the foundation’s purpose, and investment guidelines were discussed as well as mutual funds, crime fiction, Rollski and gin (EVENT NOTE: VIRTUAL DAY FOR FOUNDATIONS ASSETS – 12.5.2021).

Hill: Why is the foundation’s assets a construction site?

Karow: Many things come together. I always say: „We’ve always done it this way meets low-interest-rate“ which explains everything. In Germany, we have a long tradition of investing foundation assets purely in bonds. Thanks to this love of bonds, about 90 % of the 100,000 or so foundations that existed in this country in 1914 disappeared after the Second World War. This is often forgotten, and in practically all countries where foundations existed, investments are made differently, namely broadly and globally diversified, with the focus on a decent return and not only on capital preservation. The fear of loss unites many foundation managers, but it is not a fear that is goal-oriented. I bought my first share when I was 13, and to date, there have been a few crashes and corrections, but each of these setbacks was temporary, one just had to work on the portfolio now and then. Ordinary income is the most important goal of managing foundation assets, and if it is, then the investment policy of a foundation at 0.0% interest rates in the next decade must look different than it did 10 or 15 years ago. But something is changing, that is already foreseeable.

Hill: What options do foundations have in your eyes?

Karow: Well, foundations can continue to do it themselves, but they, i.e. those responsible, must devote sufficient professional and time resources to make an appropriate decision on the investment of the foundation’s assets. It also includes having obtained all possible information to support this decision, just like a prudent businessman. If I’m unable to manage to do this, and as in the case of capital investment this is very likely, doing it myself is not the first option, in my eyes anyway. Foundations should therefore take the path of delegation, i.e. delegate the task of managing the foundation’s assets to professionals. This changes the role of foundation officers away from active portfolio manager to passive portfolio controller, and for me that fits the times much better than fiddling around with a few stocks here and a few bonds there. Before foundation boards do that, they should rather write proper and up-to-date investment guidelines, because if the framework fits, the room for manoeuvre is then at a maximum.

Hill: You are a friend of fund investment for foundations, and you run the platform www.fondsfibel.de here. Why is that?

Karow: If I delegate the management of the foundation’s assets, then fund investment or the compilation of a fund portfolio is advantageous in my eyes from many points of view. Foundations must comply with the diversification requirement, and they can do this wonderfully through funds by investing in different concepts, styles, and asset classes. But foundations must also follow the founder’s will, which means that above all the purpose must be realized. Accordingly, I look for funds that have a longer distribution history or where income is the focus. Since a lot of information on funds is also available transparently, it is easy to make an informed decision, and control based on this information can be institutionalized. In addition, five fund units and five distributions are easier to account for than countless individual stock and bond positions. For me, fund investment is the most suitable way for foundations for these reasons, but above all, the individual goals of the foundation can be mapped much more granularly with funds. This also includes sustainability, on which every foundation has its own opinion; this must then also be reflected in the portfolio, which can be done well with funds. The investment guideline can state that the foundation only buys Article 9 funds, which will make the foundation portfolio look different. I don’t think it’s feasible for most foundations to do ESG themselves.

Hill: When you are not organizing virtual days for foundations, what drives you?

Karow: As a young father, sport is quite important to me, simply as a balance, I like roller skiing, it’s a nice alternative to running when it doesn’t work out with real skiing at the moment. And then I have time for a crime novel again, do miss writing, but on the other hand, being an entrepreneur is also good yet challenging. Currently, we are blogging and working on a foundation marketplace gin, which already has the name.

Hill: Thank you very much for the interview.

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1. FRANKFURT & FOUNDATIONS (EVENT NOTICE – 12.5.2021 – PANEL / INFORMATION – SELECTION):

Foundation assets 2030: A discussion with Hans-Dieter Meisberger (DZ Privatbank), Thomas Meissner (Stiftung Polytechnische Gesellschaft), Arndt Funken (Aquila Capital).

Eco and green are not everything. Final impulses on the couch on the contemporary management of foundation assets by Harald Brockmann (Mission Central of the Franciscans), Immo Gatzweiler (AXA Investment Managers), Markus Hill (fondsboutiquen.de)

ADDITIONAL INFORMATION / REGISTRATION – VIRTUAL DAY FOR THE FOUNDATION’S ASSETS: www.vtfds2021.de

2. FRANKFURT & FOUNDATIONS (INFORMATION – SELECTION):

a) Frankfurt Foundation Database (quote): „There are over 600 foundations with their registered offices in Frankfurt am Main. Foundations are involved in many important social areas in our city: in education and training, in science and technology, in art and culture, in social issues through to assistance for the elderly, as well as in nature conservation and environmental protection.“ – SUPPLEMENTARY INFORMATION: Foundation Database | City of Frankfurt am Main

b) Initiative Frankfurter Stiftungen (citation): The Initiative Frankfurter Stiftung sees itself as a network of people who bear responsibility for shaping the foundation system in and around Frankfurt. It has existed since 1993, and finally as a registered association since 1997. Its members represent the entire spectrum of the foundation sector and represent young and old, large and small, charitable foundations under civil law as well as institutionalised foundations. Members are co-opted. Membership is by name.“ – ADDITIONAL INFORMATION: www.frankfurter-stiftungen.de

VIRTUAL DAY FOR THE FOUNDATION ASSETS (12.05.2021 – www.vtfds2021.de)

Supporting partners:

Media partner:

Partner:

Photo: www.iStock.com/trabantos

„One, two, three, at a whizzing pace time runs; we run with it.“ (Wilhelm Busch). Frankfurt, innovation, resilience, and entrepreneurship – Markus Hill spoke with author Ortrud Toker for FINANZPLATZ-FRANKFURT-MAIN.DE about entrepreneurial personalities, inventiveness, and the historical significance of slowness, speed, and communication. Topics such as technology, inventiveness, and Prussia are addressed as well as data transmission, banking, and Frankfurt’s Paulskirche.

Hill: The Frankfurter Rundschau called your book „Vom Ende der Langsamkeit“ a public favourite, HR2 Kultur and Thalia recommend your book as a „Buchtipp“. Before Lockdown, you had many readings, including at the DenkBar, the Weltenleser bookshop and the Kulturfabrik in Sachsenhausen.  What is your book about?

Toker: „The End of Slowness“ is about three extraordinary personalities of the 19th century. Werner von Siemens, Philipp Reis, and the couple Bertha and Carl Benz. They were all instrumental in groundbreaking inventions, namely telegraphy, the telephone, and the automobile. These inventions changed the world and still shape it today.

Hill: I see, it’s about entrepreneurial personalities. What do they have in common and how do they differ? Because I know two names, but I’m not familiar with Philipp Reis.

Toker: We are dealing with three completely different entrepreneurial characters. Werner von Siemens is probably the most popular and most influential. What distinguishes him is that he never lost sight of his goal, always remained curious, open, and above all flexible. He never allowed himself to be permanently discouraged by setbacks and defeats, but rather they spurred him on to achieve great things. In 1842, already as a young artillery officer, he used his imprisonment in Magdeburg prison, for example, for experiments that led to a significant discovery and his first patent. The beginning of a lifelong career, full of ups and downs. The Friedrichsdorf teacher Philipp Reis, on the other hand, was hapless and found no investors throughout his life. He died before the further development of his telephone began a worldwide triumphal procession. And what would have become of Carl Benz’s „Kutsch‘ ohne Gäul'“ if his wife Bertha had not tirelessly encouraged and supported him over the decades is written in the stars?

Hill: So your book is also about the fact that inventiveness alone is not enough to be successful in the long run.

Toker: Absolutely. It’s commonplace that the gods put sweat before success. But what exactly that looks like and what it means in detail can be seen very clearly in these three CVs. Not only diligence and perseverance are an advantage, but also perseverance in achieving goals and a special resilience. Resilience refers to the ability to keep going after setbacks, to look forward like skipjack, and to learn productively from mistakes. The examples in my book show how this can be done. Every era needs clever, unconventional solutions, innovators, and visionaries. Entrepreneurs who burn for their goals, take calculated risks and assume responsibility. Only when innovative ideas are accompanied by the courage to implement them, openness, a sense of proportion, and staying power can they lead to long-term success. There are plenty of examples where perseverance has paid off. Today’s superstars are Steve Jobs, Elon Musk, and Jeff Bezos. But of course, people who have a smaller sphere of influence also know this.

Hill: Everyone talks about speed, but why do you talk about the end of slowness in your book?

Toker: In the inventions of the main characters in my book, Siemens, Reis, and the Benz couple, the acceleration of the transport of people and news plays a central role. But what exactly speed is and what significance it has in our society is constantly being redefined. In 1888, Bertha Benz needed a whole day to cover the 100 kilometers from Mannheim to Pforzheim in the first automobile. Her husband Carl Benz wanted to stop producing cars at a speed of 50 kilometers per hour.

Today, the new mobile radio standard G5 is about transmitting data speeds of up to 10 gigabits per second, which means communication in real-time and enables completely new applications. 100 billion devices would be addressable at the same time.

Hill: Fast data transmission was also politically and militarily relevant and still is today. Is that why Frankfurt’s Paulskirche also plays a role in your book?

Toker: Wired telegraphy was a brand-new technology in 1848/49 during the revolution. The Prussian king in Berlin wanted to be informed as quickly as possible about what was happening during the National Assembly in Frankfurt. Werner von Siemens was therefore commissioned to build the first European trunk line from Berlin to Frankfurt. When the National Assembly decided on 28 March 1849 to offer the imperial dignity to the king, the news travelled from Frankfurt to Berlin at the sensational speed of just one hour. If you think about it, we’re talking about a single wire, a cable connection on poles. That’s how it started back then. Today, Frankfurt is the location of Europe’s largest Internet node.

Hill: The financial world is also dependent on precise and fast data transmission – does Frankfurt have location advantages here historically?

Toker: Certainly, that is the point. My book is about the beginnings of accelerated communication, the first hot wire between Berlin and Frankfurt. There are famous precursors before telegraphy. At the beginning of the 19th century, the Rothschild banking family maintained their lofts for carrier pigeons on the roofs of their banking houses and used them to transport stock prices. In this way, they outflanked the competition.

Hill: That sounds like the motto „knowledge is power“.

Toker: Quite right. Nathan Mayer Rothschild knew before the British prime minister that Napoleon had been defeated at Waterloo and used this knowledge profitably for share trading. Carrier pigeons were also used by Julius Reuter in the mid-19th century for bridging purposes as long as the telegraph network was not yet fully established, even before he founded his news agency.

Hill: Thank you very much for the interview.

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Ortrud Toker, born in 1957, studied art history, classical archaeology, and philosophy at the Johann Wolfgang von Goethe University in Frankfurt. She worked for many years at the German Film Museum and the Museum of Communication in Frankfurt, among others. Her focus is on early film and media history.

The book „Vom Ende der Langsamkeit“ (The End of Slowness) by Ortrud Toker is published by Henrich Editionen in Frankfurt: www.henrich.de)

“Jewish life in Frankfurt” – This is also the title of the brochure that has just been published by the City of Frankfurt, Department of Finance, Participations and Churches in cooperation with the Jewish Community of Frankfurt and which is about common history, discovering, experiencing and also remembering. The mayor as well as the head of the church, Uwe Becker, and the chairman of the board of the Jewish community have written committed words of greeting.

Jewish life in Frankfurt has a great tradition going back almost 900 years. The historical traces of Jewish life can also be traced in Frankfurt’s wonderfully restored old town. The horrific expulsion and murder of Frankfurt Jews in the Holocaust left terrible scars on our urban society. After 1945, there were only a few Frankfurt Jews who also returned to their destroyed hometown; before 1933, the Jewish community consisted of 30,000 members and embodied the most significant era of Jewish activity up to that time.

It was not until 1864 that Jewish Frankfurt residents gained full equality and the community grew; in 1882 the synagogue on Börneplatz (destroyed by the Nazis, who then built a high-rise bunker over it) was consecrated, and in 1910 the Westend Synagogue. Today the Jewish community has about 7,000 members and is the second largest in Germany. In 1986, the Jewish Community Center was opened, which is now called the Ignatz Bubis Center. This center, like other buildings here, makes Jewish life in the city “alive” again. The Jewish kindergarten, the Lichtigfeld School, the Jewish sports club TUS Makkabi in the heart of Frankfurt, and the Jewish Museum, which was reopened in October with its impressive bright new architecture, are also very noticeable and visible.

CORONA, LOCKDOWN, AND MUSEUM

“Closedbutopen” was the motto for the Jewish Museum during the second lockdown until its radical closure. It is the oldest Jewish Museum in Germany and focuses on 800 years of Jewish history in Frankfurt. It was rebuilt for five years until it opened on Oct. 21, 2021, with a rather ascetic ceremony in the Alte Oper, allowed with hygiene measures due to the pandemic. The Jewish Museum has its own YouTube channel with many informative and worth seeing films, it is present on Twitter, Facebook, Instagram with daily posts, all of which are stimulating and make curious to visit – at present and later.

CULTURE, EVENTS, AND CURIOSITY

Frankfurt, as a small but decidedly powerful metropolis, now also features Jewish Film Days in May and Jewish Culture Weeks in September. Jewish life in its diversity is not limited to the aforementioned buildings but takes place everywhere in Frankfurt because there is an impressive range of Jewish institutions and activities here. One example is the Frankfurt Schönstädt Lodge, B’nai B’rith, which was founded in 1888 as the 20th B’nai B’rith Lodge in Germany and whose members were highly active and volunteered for the common good. Banned during the Third Reich, it was re-founded in Frankfurt in 1961 – with changed tasks but always remaining true to its ideals and values.

In the beautiful old rooms of the lodge, cultural events of various kinds take place at regular intervals, which are very popular in the city society.

Jewish life in Frankfurt is also embodied by the brothers James and David Ardinast. They enrich the gastronomic and nightlife culture of our city with many restaurants such as the “Stanley Diamond” or the “Bar Shuka” in Niddastraße. Another example of this diversity is the Jewish Community Center for the Elderly, nursing home with a residential facility for the elderly, and the Henry and Emma Budge Foundation Care Center, which is open to Jews and Christians alike. Both facilities also offer numerous cultural events, which many Frankfurt residents enjoy attending. Representative of many activities within Jewish life in Frankfurt is the Interfaith Choir, which is jointly organized by two choirmasters, the Protestant cantor Bettina Strübel and the Jewish Chasan Daniel Kempin, which signifies another facet.

Perhaps the readers of this article have become curious about many more Jewish traditions and stories of our city Frankfurt am Main, freely according to the motto: “A new kind of thinking is necessary if mankind wants to live on” (Albert Einstein).

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Eva-Maria Klatt, retired senior lecturer, Deputy Chairwoman of the DiG Frankfurt (German-Israeli Society)

JEWISH MUSEUM FRANKFURT: www.juedischesmuseum.de

CoVid 19 is one of yet multiple indicators showing the global economy – like society as a whole – needs a powerful digital infrastructure if it wants to provide growth and prosperity in the long run. However, the current pandemic crisis represents a catalyst increasing the speed of change and, in particular in Germany, has brought up the topic of digital infrastructure and data centers, and made it a subject of public discussion. The topic´s ambivalence is obvious: While many German companies are struggling with digitization, German fiber network access for households (FTTH) remains at a low 12 percent. Yet, at the same time, Germany beyond its borders is known for an excellent fiber optic network, state-of-the-art data center space and, referring to De-CIX Frankfurt, hosts the world’s largest internet node in terms of data throughput. Peak traffic at De-CIX reached 9.1 Tbit / s in March 2020 and 10 Tbit / s in November last year – both rates representing world records.

Frankfurt´s and thus Germany´s transformation into an international digital hub has historical, but above all geographical and geopolitical reasons. Typical for real estate, Frankfurt´s location also is decisive for data centers. Nodes where submarine cables land or, as in Frankfurt, where the world’s fiber optic backbones cross, are predestined as an exchange platform if they also offer a business ecosystem. That eco system needs to include international companies as well as SMEs, and an end customer base possessing economic strength, as well as qualified employees and specialized service providers. Metropolitan region Rhine-Main represents such an ecosystem.  The international banking and digital infrastructure heavyweight counts almost six million inhabitants, including three million employees in a widely diversified economic landscape. In addition, the location as such is geographically well positioned: The region represents the middle of Europe, where data streams meet originating from across the Atlantic (via England / London and the Netherlands / Amsterdam) as well as data streams originating from Scandinavia and Southern Europe. Those are linked with Mediterranean submarine cable hubs, which in turn connect Germany with Asia and Africa.

All of that explains why regarding Frankfurt business premises international players in the data center industry are willing to pay 2000 € / m², ten times the local standard for commercial property on the outskirts of Frankfurt. Taking into consideration the horrendous investment costs of a data center itself, which (without the cost of the property) can quickly run into three-digit million figures, and considering high level sales and distribution requirements, it becomes obvious why the data center asset class –  despite massive, sustainable growth and downright fantastic returns – in large parts remains in the hands of specialized REITS such as Digital Realty, KeppelDC REIT as well as telecommunications groups such as NTT and 1 & 1. Those vehicles in turn own or rent to colocation providers such as Interxion, Equinix or Maincubes, which again in turn provide server space for companies and hyperscalers, i.e. cloud providers such as Amazon AWS.

Given that background of specialists and global players, the question arises whether the entry barriers for capital, market penetration and know-how for SMEs, project developers and non-institutional investors are not already too high to jump on the bandwagon.

Today, large cloud providers like Microsoft (Azure), Google and Amazon AWS, are securing their oligopoly position in metropolitan areas. With the establishment of availability zones growth of colocation providers in Frankfurt is leveraged, same as in the Rhine-Ruhr and the greater Berlin area, in Hamburg and in Munich. The cloud hype in addition is reinforced by efforts of the EU and its Gaia-X program. Yet, many technologies that are currently evolving, like 5G, autonomous driving and IoT, are exemplary, and require a high density network of data processing and storage levels, small data centers within a distance of less than one kilometer (Edge), regional sub-hubs (Fog) and international (cloud) hubs, a structure resembling a distribution network in logistics.

Apart from a few European metropolitan regions, the Rhine Main area is currently anything but comprehensive and thus offers considerable potential for regional players – like energy suppliers, project developers and property / real estate owners as well as SMEs. Regardless of investment costs being considerably even when it comes to smaller data centers, in areas outside of Frankfurt, it is possible to keep investments low due to lower property costs and modular construction methods – without at the same time having to forfeit latest, environmentally friendly technology and scalability.

Sustainability or ESG is a topic already playing a central role when it comes to data centers in Germany. The issue is driven by corporate responsibility, legal requirements, or simply out of economic reasons. Germany with its ultra high energy prices even on a global level does not exempt data centers from the EEG surcharge, an additional cost factor punishing high energy consumption. In addition, power grid expansion in some metropolitan areas is not keeping up with demand, representing a significant challenge in particular for Frankfurt. Precisely that creates opportunities for regions where energy supply is a given, or, like in Northern Germany, where a surplus of alternative energy is found. Integrating data centers into local structures – waste heat utilization, smart energy storage, charging infrastructures, etc. – will transform data centers into ESG supporters, and stop them from being marked part of a problem. This integration, however, requires the involvement of local and regional actors – and offers them the opportunity to participate in data centers and the profits they produce.

It can thus be stated that data centers can be highly interesting not only as the basis of digitization for society in general. Also, they represent an asset class for open minded, modern companies and investors. All of that works even on a small scale – given the right approach to the market and technology level are provided. And what´s more, a number of regions in Germany, today still white spots for international providers, with their innovative companies and qualified employees, can set up a link to the world, and enable regional actors to design digital infrastructures on a level playing field with international players.

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Michael Jakobi, LL.M. is a consultant and project manager in the field of digital innovation & infrastructure at contagi Digital Impact Group – www.contagi.ch