AllianzGI invests over $300m in Asia private credit

The investment unit is building its credit exposure to the Asia-Pacific region by deploying proprietary capital and expanding staff numbers.

Allianz Global Investors is expanding its presence across the Asia-Pacific private credit segment.

The investment management arm of the German financial services firm has deployed more than $300 million in the region since it first started investing there in late-2018, according to a statement on 13 July.

AllianzGI manages the parent group’s proprietary capital. Regionally, the investment management unit focuses on Australia, India, Indonesia, Singapore and Vietnam. Its private credit investment approach includes investing in real assets across selected sectors such as telecommunications, chemicals and infrastructure.

It is understood the Asian credit team invests in companies that generate healthy cashflows and sectors that reflect long-term secular trends. “We are not looking at distressed debt and special situations investing,” said Sumit Bhandari, managing director and lead portfolio manager at AllianzGI’s Asia private credit team.

Besides the bilateral corporate lending segment, his team is also investing in the term-loan B market, also known as the institutional term-loan market. “The structure is typically used in a lot of Australian LBOs, and increasingly in Indian acquisition financing with financial sponsors, and large private equity players tend to be the users,” Bhandari said.

AllianzGI has added two more members to the Asia private credit team: senior investment analyst Ankur Agarwal, from Credit Suisse, and investment analyst Jun Wei Ong from Bank of America Merrill Lynch.

The Asia credit team is headed by Bhandari, based in Singapore. As PDI reported in November 2018, he joined the firm with Weizhong Yun from The Abraaj Group, a Dubai-headquartered private equity group.

The following year, the firm made two more hires: Siddharth Rao, from Edelweiss Alternative Asset Advisors, and Paul Schrecongost, from Nomura Singapore. The existing team members at the time of the hires were Bhandari, Yun and a junior portfolio manager as of August 2019.

According to Bhandari, the Asia credit team has been focusing on the contractual cashflow component of a deal, such as a concession project in the infrastructure sector given the uncertainty over projecting future cashflows from companies. “That is part of it,” he said. “But also, it is investing in things which are more secular in nature and themes that are time-tested, resulting in higher cashflows going forward.”

Globally, Deborah Zurkow took on responsibility for leading AllianzGI’s investment platform in January 2020. She has been heading AllianzGI’s global alternatives team since 2016. Zurkow joined in 2012 as managing director and chief investment officer of infrastructure debt.

AllianzGI’s global investment scope spans liquid and illiquid alternatives, equities, fixed income and multi-asset strategies. As of 31 March 2020, its global assets under management was €510 billion, with €35 billion in private debt and real assets, such as infrastructure debt.