Infrastructure debt
Infrastructure debt is an asset class for institutional investors that aims to provide long-term stable returns and cash flows. At AllianzGI, we source high credit quality Infrastructure Debt transactions by identifying, differentiating and managing risk.
Our Infrastructure Debt platform has been active in the primary market on behalf of Allianz and third-party clients since 2012. We take pride in our dedicated team’s substantial pre-existing industry relationships and execution experience of infrastructure debt tailored for institutional investors. The team differentiates itself through the sourcing and origination of private placements, innovative financial engineering and the enhanced credibility that our current client base delivers with borrowers.
Market recognition1
We are proud to be the recipient of a number of industry awards for our contribution to the sector. Additionally, a number of deals that we have participated in have also won awards. Some of the most recent awards are noted below:
Infrastructure Debt team
Our Infrastructure Debt team is an experienced and well-resourced team with a proven operational platform and investment process. In fact, five of the senior team have been working together since 2004, conducting in-depth analyses of the infrastructure debt market and participating in infrastructure projects. Since the platform was established in 2012, the team has closed numerous transactions across Europe and the US, spanning a variety of asset classes, from PPP to utilities and renewables.
Our investment strategies
Our Infrastructure Debt platform was incepted in 2012, when we initially focused on Core Infrastructure with investment grade features.
In 2017, we expanded the Infrastructure Debt platform into the “crossover” credit spectrum, targeting senior debt on core+ infrastructure assets and junior debt on core infrastructure assets.
With the launch of the Allianz Resilient Opportunistic Credit strategy in 2021, we can now offer the full range of credit opportunities.
Illustrative risk/return profiles2
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The philosophy of the Core Infrastructure Debt strategy is to source secured long-term investment grade debt in core infrastructure, with an attractive pick-up in spread to public debt of an equivalent credit quality. In our opinion, these investments tend to have lower default probability, higher recoveries and lower correlation than corporate debt, particularly over the longer term.
Care needs to be taken in selecting the right investment as not all transactions labelled as “infrastructure” exhibit the same stability of future cash flows. At AllianzGI, we focus on assets that meet the following criteria:
- Essential physical asset
- Long-term stable revenue stream
- Long-term debt
- Clear business purpose
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The Resilient Credit strategy is a cross over strategy investing across core and core+ sectors. As the underlying assets will exhibit slightly higher risks, our focus will be on shorter duration assets with an aim to capture higher credit margins compared to the Core Infrastructure strategy. This strategy enables us to match institutional investors looking for medium-term reliable income with the borrowing needs of companies that exhibit resilient business models and are capable of delivering robust gross margins.
Our strategy lends directly to private infrastructure-like asset-heavy companies with a stable medium-term outlook. Our dedicated and experienced team originates and structures transactions, which demonstrate monopolistic or oligopolistic characteristics, high barriers to entry and strong revenue visibility over the term of the transaction.
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The Resilient Opportunistic Credit is a high yielding infrastructure credit strategy to complement the existing Infrastructure Debt offering of AllianzGI. The strategy aims to generate higher-end credit returns by investing in core, core+ and core++ / value-add infrastructure corporates on a mostly subordinated basis. It is our aim that investors will be able to benefit from a cash yielding product un-correlated to public market returns.
What other strategies are available? |
1A ranking, a rating or an award provides no indicator of future performance and is not constant over time.
2Source: Allianz Global Investors, return and risk parameters are illustrative and not to scale. Performance of the strategy is not guaranteed and losses remain possible.
For professional investors only, strictly private and confidential solely for the intended recipient
Infrastructure debt investments are highly illiquid and designed for professional investors pursuing a long-term investment strategy only.
Investing involves risk. The value of an investment and the income from it may fall as well as rise and investors might not get back the full amount invested. Investing in fixed income instruments may expose investors to various risks, including but not limited to creditworthiness, interest rate, liquidity and restricted flexibility risks. Changes to the economic environment and market conditions may affect these risks, resulting in an adverse effect to the value of the investment. During periods of rising nominal interest rates, the values of fixed income instruments (including positions with respect to short-term fixed income instruments) are generally expected to decline. Conversely, during periods of declining interest rates, the values of these instruments are generally expected to rise. Liquidity risk may possibly delay or prevent account withdrawals or redemptions. Past performance does not predict future returns. If the currency in which the past performance is displayed differs from the currency of the country in which the investor resides, then the investor should be aware that due to the exchange rate fluctuations the performance shown may be higher or lower if converted into the investor’s local currency. The views and opinions expressed herein, which are subject to change without notice, are those of the issuer companies at the time of publication. The data used is derived from various sources, and assumed to be correct and reliable at the time of publication. The conditions of any underlying offer or contract that may have been, or will be, made or concluded, shall prevail. The duplication, publication, or transmission of the contents, irrespective of the form, is not permitted; except for the case of explicit permission by Allianz Global Investors UK Limited.
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