The partnership will focus on emerging markets
October 6, 2016: Allianz Group and International Finance Corporation (IFC), a member of the World Bank Group, have signed a partnership under the Managed Co-Lending Portfolio Program (MCPP). Under the agreement, Allianz intends to make an investment of $500 million which will be co-invested alongside IFC debt financing for infrastructure projects in emerging markets worldwide.
The infrastructure debt team of Allianz Global Investors has structured the transaction and will manage the fund on behalf of investors. IFC will originate, structure and administer the loans on behalf of the fund in addition to providing a first loss protection.
Allianz Global Investors has established an infrastructure debt fund that will co-invest with IFC in a portfolio of loans which IFC has granted to infrastructure projects in emerging economies and fulfill a defined set of eligibility criteria. The IFC will provide a first loss protection in order to reflect the risk/reward profile of an institutional investor. This will offer Allianz insurance entities access to Emerging Markets infrastructure loans, which have historically been funded by international development institutions, local banks and some international banks.
Allianz Global Investors has 25 offices in 18 countries. It provides global investment and research capabilities with consultative local delivery. It has more than £469 billion in AUM for individuals, families and institutions worldwide and employs more than 500 investment professionals. Its infrastructure debt team, led by Claus Fintzen, focuses on senior and stable debt investments in the essential infrastructure sector. The team currently has £8bn under management.
IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in emerging markets. In FY16, long-term investments in developing countries rose to nearly $19 billion.
Oliver Bäte, CEO of Allianz SE, says, “We work to ensure that our activities are profitable and sustainable. We create long-term value by embedding sustainability in our core business. The partnership with IFC and our co-investment in infrastructure is a perfect example how Allianz can provide thought leading investment expertise to support the economic development of emerging countries as well as serving the interest of our customers.”
“Modern infrastructure is essential for economic growth and lasting prosperity,” said IFC CEO Philippe Le Houérou. “Yet, a huge investment gap exists in this sector—totaling trillions of dollars a year in emerging markets alone. MCPP infrastructure marks a breakthrough in the search for large-scale financing solutions to the challenges of development. It is a key building block in the global effort to move from billions to trillions in development finance.”
Andreas Gruber, Allianz Group Chief Investment Officer, says, “This partnership underlines how we at Allianz can create value for our customers by combining entrepreneurial investment ideas with industry-leading implementation know-how. Together with IFC we were able to conceive a reliable investment vehicle appropriate to the very long-term perspectives of all parties involved.”