Night trains have long struggled to compete with low-cost air and bus travel in Europe. AFP
Night trains have long struggled to compete with low-cost air and bus travel in Europe. AFP
Night trains have long struggled to compete with low-cost air and bus travel in Europe. AFP
Night trains have long struggled to compete with low-cost air and bus travel in Europe. AFP

Rail start-up aims for night train revival on Berlin to Brussels route


Tim Stickings
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A European sleeper train start-up has announced it will launch its first route between Berlin, Amsterdam and Brussels in May 2023.

The more than 10-hour service will initially run three times a week and is intended to put overnight travel “back on the map” after years of decline.

The launch was pushed back from summer 2022 after setbacks including a lack of available rolling stock.

The operator, European Sleeper, said tickets will go on sale in February, with the first train scheduled to depart on May 25.

A typical train will leave Brussels at 7pm, stop in Amsterdam at 10.30pm and arrive at Berlin’s main station shortly before 7am.

In the other direction, it will leave Berlin around 11pm, reach Amsterdam at 6.30am and arrive in Brussels at 9.30am.

The start-up, which was founded by Dutch and Belgian operators, plans to extend the route eastward to Dresden and Prague by 2024.

It said tickets would start at €49 ($52) for a seat in a compartment, rising to €79 ($84) for a bunk bed and €159 ($169) for a private sleeping car.

The company raised €2 million ($2.1m) from investors to buy the rolling stock it needed.

A daily service will be introduced as soon as possible, it said.

The sleeper train business has long suffered at the hands of low-cost air and bus travel, with many routes closed since the 1980s.

Germany’s main rail company ended its City Night Line service in 2016 while French operator SNCF closed all but three routes.

However, there is some enthusiasm among policymakers for a sleeper train renaissance in Europe.

It is motivated not just by romantic allure but by the lower emissions involved when passengers switch from air to rail.

An overnight route from Vienna to Brussels reopened in 2020 while an Austrian operator is opening new routes to Italy in 2023.

But new high-speed lines have been higher on the EU’s recent agenda than sleepers, disappointing night train enthusiasts.

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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Updated: December 28, 2022, 11:29 AM