Infrastructure: Investment for the future
An investment in infrastructure is an investment in the future drivers of economic and financial performance. In fact, the global infrastructure investment requirement up to 2040 is estimated at 94 trillion US dollars across the energy, communications, transport and water sectors.1
We urgently need better energy grids, railways services, and more digitalization. And the lack of modern infrastructure is something many of us experience every day.
Given stretched public finances in many locations, the huge investment needs for infrastructure require more private capital to bridge the gap. And due to the long-term and essential nature of infrastructure assets, they can be an attractive diversifier within an investment portfolio.
Our experience
At Allianz Global Investors, we’ve been investing in infrastructure since 2008. Since then, we’ve made over 250 investments across 6 continents and can rely on an experienced team with a proven track record and strong sourcing opportunities.
In that time, we’ve built a reputation as a trusted partner for managing complex infrastructure projects and have established a large international network with relevant partners and stakeholders.
In fact, we’re helping shape the market. From our deep commitment to ESG to our groundbreaking transportation or digitalization projects, we don't just invest – we build, develop, and sustain vital infrastructure around the globe. And as part of Allianz Group, our clients enjoy the confidence that comes from Allianz Global Investors having invested for many years on behalf of one of the world’s largest and most sophisticated investors2.
Why partner with us?
With over EUR 50bn of investments AuM across our infrastructure platform, we are one of the leading players in the market. We’re the number 1 infrastructure debt capital raiser in Europe. Pioneered by Allianz, one of the largest investors in infrastructure globally3, we know how to build and manage a portfolio strongly delivering on our promises.
Data centres, solar farms, green hydrogen production, hybrid trains, roads, a super sewer and an interconnector – we have investments in a vast portfolio of projects designed to make today’s infrastructure ready for tomorrow. And we expect to see many more investment opportunities in this sector. For example, electricity grids are critical for the clean energy transition. In Europe alone, the EU Grid Action Plan is targeting almost €600 billion in investments in the next five years.4 Former ECB President Mario Draghi outlined in a recent study for the EU Commission that the EU must raise annual investment by €800 billion to remain competitive, with digitization and decarbonization in focus.5
And in this space, we’ve got form. Plus, we have shaped the market from infrastructure to impact with our innovative solutions.
From debt to equity, from direct to indirect strategies,
we can offer the entire bandwidth of solutions. (AGDIEF III, AICOF II).
Where we operate
We’ve invested in projects across the world, in a variety of different sectors including renewables, social infrastructure, transport, and communications. For example, we are invested in the data center provider Tierpoint in the US, the “SuperSewer” Tideway Tunnel in London and we’re helping to further develop metro stations and trains in Spain, France, and Germany.
Spain
Metro networks in Madrid and Barcelona
Queenspoint is invested in rail lines, metro stations and a maintenance company in Madrid and Barcelona, serving over 40 million users annually. The company comprises the management of two light rail lines and 29 stations of the Madrid metro system. This includes the operations of a new automatic subway line integrated within Barcelona’s underground network, interconnecting five municipalities in the surrounding metropolitan area and 28 stations of the Barcelona metro.
Portugal
Gas network goes green hydrogen
Floene is the company with the largest gas distribution network in Portugal. Its network is mostly built in polyethylene (94%) with a length of over 13,000 km that is serving c.1.1 million households. Polyethylene pipes allow the transport of green hydrogen and non-fossil gases, providing an extended service life as well as lower maintenance costs and leakage rates. In March 2023, the company officially introduced green hydrogen into the gas distribution network in Portugal for the first time.
United Kingdom
Service operation vessels for wind farms
Operating and maintaining an offshore wind farm is not an easy task. To do so, Service Operation Vessels (SOV) are needed. These are being built by Northstar and used to accommodate offshore wind farm technicians operating in field as well as provide a logistics hub. Powered by hybrid technology (electricity and fuel) they deliver a safe and efficient access to the wind turbines. This wind project in the UK is located 130 km off the Northeast coast of England.
United Kingdom
Solving the problem of wastewater flowing into the Thames
London sewers no longer have the capacity to meet the demands the city´s population. To solve this environmental problem, a major new sewer, the Thames Tideway Tunnel, is being built. Aimed at improving London’s environment, appearance and public health, the “super sewer”’ with a diameter of 7.2m will run for 25km, mainly beneath the river Thames intercepting sewage overflows and cleaning up the river.
Germany/United Kingdom
Creating the first energy link between Germany and the UK
The NeuConnect interconnector (a structure that enables electricity to flow between two separate power grids) involves running undersea cables between Germany and the UK to create an invisible energy highway, providing, for the first time, a direct power link between two of Europe’s largest energy markets.
When completed, the interconnector will span 725 km and up to 1.4 gigawatts (GW) will be able to flow in either direction between the two countries, powering up to 1.5 million homes
Germany
Battery powered trains
In many areas due to the lack of electrified track sections, diesel trains are still operating. These are now replaced with the world's first battery-electric train fleet in regular service in the federal state of Northern Germany, Schleswig-Holstein. In 2020, Northrail acquired 55 innovative battery-powered trains which will help to make rail transport more attractive and contribute to the reduction of carbon emissions. Schleswig-Holstein has thus set a trend towards battery trains.
Germany
Fibre roll-out for ultra-speed internet
The pandemic has accelerated the shift to digital communication.The prerequisite is an ultra-speed internet connection. However, Germany still lags. “Unsere Grüne Glasfaser" was founded in 2021, deploying local fibre optic networks throughout Germany with a focus on rural and semi-rural areas. The goal is to create an open-provider fibre network of over 50,000 kms delivering environmental benefits through energy efficient operations and enabling the transition to fibre in the deployment areas.
Austria
Fibre roll out for underserved areas
Europe continues to see rapid growth in household bandwidth requirements and fibre adoption, Austria has lagged peer nations so far. Therefore, the roll out of the new öFIBER fibre-to-the-home broadband network by öGIG since 2019 with a focus on municipalities with less than 5,000 inhabitants has been a needed push to the digitization of Austria. With a near-term target of more than 500,000 households by 2030 öGIG will tackle the increases in bandwidth demand.
France
Railway services for better transport
The more attractive public transport is, the more it will become an alternative for people who usually go by car. The expansion of a high-quality regional railroad network, such as the one supported by SPL Grand Est Mobilités in France, is key for the reduction of greenhouse gas emissions. AllianzGI has provided financing for the acquisition and refurbishment of about 200 regional express trains to the company to provide their clients and commuters with better services.
Finland
Green hydrogen plants
In 2022, we did our first investment in green hydrogen: Ren-Gas in Finland was founded with the goal to develop a decentralized power-to-gas portfolio. As renewable synthetic methane is the main product of the plants, it can be used as fuel by trucks, ships and for other industrial purposes, contributing to stronger energy security, competitive renewable gas and heat prices, and significant emission reductions in the heavy road transportation sector as well as in the heating sector.
United States
Data centers for more connectivity
TierPoint’s goal as a leading data center operator in the U.S. by the number of colocation facilities and markets served, is to further grow and develop its business.
To do so, the company is committed to ESG goals, having programs in place to promote efficient water and power usage, diversity and inclusion, and active board oversight. To drive digitalization and sustainable goals is important and AllianzGI supports the company’s development with financing.
Colombia
Road project connecting people
To connect the cities of Pamplona and Cúcuta in the northeast of Colombia, and thereby many lives, the so-called Pamplona-Cúcuta corridor is being constructed and expanded. The road will reduce travel times and transport costs, directly impacting over 782,000 people locally. This corridor is built by the international infrastructure group Sacyr Concesiones which has closed the refinancing of the road project for $642 million with AllianzGI/ ACP being one of the lead financiers.
Chile
Electric transmission and PV energy plant
This project helps increase the share of renewables in the energy mix with one of the largest photovoltaic plants in the country.
AllianzGI has contributed to the Chacao project which upon completion will be the largest solar farm in Chile with a generation capacity of 480MW.
Furthermore, there will be another project to support the conversion of an energy plant from diesel to natural gas, as part of Chile’s transition to greener energy sources.
Meet our team
If you’re interested in investing, then these are the people to talk to. Our expert team have years of experience in the sector, and will help you find the right opportunity for you.
A word from our experts
A recent study by preqin estimated that the infrastructure asset class could have a compound annual growth rate of over 10% in the next 5 years (reaching USD 2.35tn AuM in 2029).6
Discover our investable themes
Navigating Rates
A dynamic approach is required as investors adapt to shifting interest rates, inflation expectations and exchange rates. Volatility will likely persist: while we expect monetary policy to become gradually less restrictive than in recent times, higher rates will likely uncover weak points as industries feel the impact of elevated borrowing costs. Visibility of how markets will develop remains limited, even in the short term, and expectations could be upended. But we are confident this environment also creates opportunities.
Diversification is key – across public and private markets – and we have the ideas and expertise to navigate the complexity.
Embracing Disruption
We think it’s time to recast traditional definitions of “disruption”. Once a story for the tech sector, disruption is now all-encompassing as artificial intelligence and other transformative technologies are used widely.
While technology may be driving many of the changes, this new wave of disruption could shape many aspects of our daily lives. There are also geopolitical shifts to watch as China becomes preeminent in high-tech industries like electric cars and India positions itself as an emerging power.
The implications of this new age of disruption will be profound and exponential, and together we can embrace the opportunities.
Achieving Sustainability
Sustainable investing is evolving rapidly. Increased flows rightly come with increased expectations of measurability and impact. The industry is on a journey: from a focus on ESG-led risk management to purposeful sustainability solutions and ultimately to impact investing strategies that contribute to measurable environmental or social benefits.
We believe this direction of travel towards real-world change will be the long-term trend of the decade. With a considered approach to achieving sustainable outcomes, we are alongside you at the different stages of your journey, whatever your ambitions.
Transforming Infrastructure
Infrastructure is key for the development and smooth running of economies and societies, but much of the infrastructure needed tomorrow does not exist today. Private capital can play a crucial role in funding essential projects as huge investments are needed, especially for the transition to greener energy.
Investors have many ways to enter this complex asset class and can pick their spot in the capital structure and the region or duration of the investment.
With our expertise and market access we are working with investors today to transform the infrastructure of tomorrow.
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1 https://outlook.gihub.org/
2 https://realassets.ipe.com/top-100-infra-investors/top-100-infrastructure-investors-2024-full-ranking/10075855.article
3 IPE Real Assets Ranking 2024
4 https://ec.europa.eu/commission/presscorner/detail/en/ip_23_6044
5 https://commission.europa.eu/topics/strengthening-european-competitiveness/eu-competitiveness-looking-ahead_en
6 Global alternatives markets on course to exceed $30tn by 2030Investing involves risk. The value of an investment and the income from it will fluctuate and investors may not get back the principal invested. Past performance is not indicative of future performance. This is a marketing communication. It is for informational purposes only. This document does not constitute investment advice or a recommendation to buy, sell or hold any security and shall not be deemed an offer to sell or a solicitation of an offer to buy any security.
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