Allianz Global Investors (AllizanGI), the investment management arm of global insurance group Allianz, has established an infrastructure debt team, the firm announced today.
AllianzGI has hired Deborah Zurkow from infrastructure-focused Trifinium Advisors, a wholly owned subsidiary of monoline insurer MBIA, to head the team. Zurkow, the former chief executive of Trifinium Advisors, will be joined by four other executives from the firm.
She and her team have, over the last ten years, amassed experience in originating and managing “over €10 billion of infrastructure senior debt, with no infrastructure credit losses,” AllianzGI said in a statement.
It added the team “has a successful track record in the origination and underwriting of investment grade infrastructure debt, as well as managing the exposure from construction to mature operations”.
At AllianzGI, Zurkow and her team have “been hired to establish a flexible platform to identify and manage investment grade debt for Allianz and third party clients”. Initially, the team will focus on European infrastructure projects, with a view to expanding “further afield,” depending on client demand, Zurkow explained in a statement.
A spokeswoman for AllianzGI could not immediately comment on whether the new debt team will be looking at raising a dedicated infrastructure debt fund. But in a statement, AllianceGI says it has the “backing of Allianz as [an] initial client”.
AllianzGI decided to wade into the infrastructure debt space on the back of declining gilt returns. “Such returns are not sufficient to cover the liabilities of some long-term investors, such as pension funds and insurers, whose requirements may be around 4 – 6 percent per annum,” AllianzGI pointed out. The investment manager says it sees “infrastructure debt as a promising bond substitute”.
Global insurance companies have taken a liking to the infrastructure debt space. In 2009, Aviva Investors, the investment arm of global insurance group Aviva, teamed up with Hadrian’s Wall Capital to help raise a £/€1 billion subordinated debt fund, which recently held a first close on £160 million (€199 million; $250 million).