Allianz holds first close for Asia debt fund at €450m

The fund is the firm’s first vehicle dedicated to investing in Asian private credit and it will target mid-market companies with resilient business models.

Allianz Global Investors has held a first close of its Asia-Pacific private credit fund at €450 million.

The Allianz Asia Pacific Secured Lending Fund is Allianz GI’s first vehicle dedicated to investing in the region and will focus on backing growth businesses with strong market positions. It is targeting €650 million and expects to hold a final close by the end of 2022.

AAPSL will invest in senior secured, senior unsecured, second-lien and subordinated debt to businesses in a broad range of industries across the Asia-Pacific, excluding China. It will have three geographic pillars focused on South Asia, Southeast Asia and Oceania.

Target businesses will typically operate in industries that have shown resilience across business cycles such as telecoms, pharmaceuticals and technology companies or which are expected to see sharp recovery after periods of market stress.

It attracted a broad range of European LPs including family offices, pension funds, asset managers and insurance companies. The fund has a standard seven-year lifespan with a three-year investment period and expects to make 20 to 25 investments with a typical size of between €25 million and €55 million per transaction. AAPSL will target an IRR in the low double-digit range.

Sumit Bhandari, lead portfolio manager of Asia private credit at Allianz GI, said: “We have established a sizeable private credit business across Asia-Pacific and our ability to lend across capital structures allows us to act as a one-stop shop for borrowers looking for customised financing solutions. Despite the current geopolitical environment, we see the Asian performing private credit market as highly attractive from a risk/reward perspective.”

The firm established its Asia-Pacific private debt business in 2018 and has so far deployed more than €470 million in secured lending finance across the region.