EUROPE - Allianz Global Investors (AllianzGI), the asset management branch of German insurer Allianz, has made a move to develop an investment-grade debt platform to participate in the structuring of new infrastructure projects at a time when pension funds are increasingly willing to diversify their investment allocation within the asset class.
While a number of asset managers are looking to acquire infrastructure loan portfolios being put up for sale by European banks due to regulatory obligations, AllianzGI is instead seeking to identify and manage investment-grade infrastructure debt primarily for Allianz and, over time, third-party clients.
AllianzGI recently put together a new team dedicated to infrastructure debt investments for this purpose, appointing Deborah Zurkow as its head.
Zurkow told IPE that Allianz would be the platform's initial investor for the time being.
"We will identify and pursue bespoke transactions for our clients but also be looking at what deals have already been structured by either the financial advisers or banks," she said.
"We will look at all transactions from the perspective of the long-term stability of the assets and its financial structure and decide whether or not we believe it is a sufficiently robust deal or whether, over the term of the loan, there seems to be a risk that the deal will maintain its stability."
She added that, as the team further developed the platform, a number of institutional investors such as other insurers or pension funds might find infrastructure attractive and be willing to gain access alongside Allianz.
The team will conduct an analysis of the asset class, as well as an analysis of the financing for each infrastructure deal that has been structured for Allianz.
"On every financing structure, we will look at all different types of requirements relative to risk coverage ratio, or the level of reserve, etcetera," Zurkow said.
"We will also analyse the technical standards and what due diligence has been done and make our own assessment as to what we think is appropriate to the structure.
"In the case where mismatches come up between what has been structured and our requirements, then we would require that the structure meet the obligations we think are appropriate."
When asked whether the team would look to acquire infrastructure debt loans being put up for sale by banks in the secondary market, Zurkow stressed that, whatever deals were considered, they would need to have the right risk/return structure.
"If that is delivered in the style of a bank portfolio, then that's fine," she said. "It's just a matter of taking everything on a bespoke basis."