Student deal is double first for AllianzGI

The investment manager has completed a first investment from its UK infra debt fund and also made its first foray into the student accommodation sector.

Allianz Global Investors (AllianzGI) has invested £119.7 million (€151.7 million; $187.7 million) in the refinancing of a student accommodation project at the University of Exeter in south-west England, PDI sister title Infrastructure Investor writes. 

The investment is the first from AllianzGI’s UK Infrastructure Debt Fund which was launched in July this year with a target of up to £500 million. According to an AllianzGI statement, it is also the first investment in the student accommodation sector that it has undertaken on behalf of clients. 

In all, the refinancing by University Partnerships Programme (UPP) involved a new tranche of £149.7 million of index-linked senior secured notes advised by Macquarie Capital. In addition to AllianzGI’s investment, the UK’s Pension Insurance Corporation – a specialist insurer of defined benefit pension funds – invested £30 million. 

The latest tranche is part of a note issuance programme by UPP which to date has been worth a total of £531.8 million. The proceeds will be used to replace existing bank debt for the construction and maintenance of the accommodation which closed in 2009. 

UPP operates 2,569 student rooms for the University of Exeter and has a portfolio of approximately 29,000 student bedrooms in total. 

“There is a significant undersupply of student accommodation in the UK and we are delighted to be working with UPP and the University of Exeter to help address this issue,” said Paul David, a director of infrastructure debt at AllianzGI, in the statement. “We also look forward to participating in more deals like UPP’s Exeter facilities at the premium end of the market.” 

When launching its fund, AllianzGI said it would target long-term, investment grade, core assets including roads, schools, hospitals, water and energy projects. Backers of the fund included Japanese insurer Nippon Life. 

Last week, AllianzGI said it was aiming to invest more than £3 billion into UK infrastructure over the next three to five years. 

AllianzGI announced the establishment of an Alternatives Group earlier this week, covering a broad range of strategies including private debt. The firm’s assets under management in its alternative strategies have more than doubled over the last year from €2.1 billion in October 2013 to €5.4 billion in October 2014. The unit will constitute the fourth pillar of AllianzGI’s global investment platform alongside equities, fixed income and multi-asset. 

Spencer Rhodes has been appointed alternative investments global business manager. Commenting in a statement, Andreas Uterman, global chief investment officer and co-head of AllianzGI, said: “Alternatives form a core part of our active offering.