Summary
The Allianz Global Diversified Private Debt strategy provides investors with access to a broadly diversified global private debt portfolio with a strong downside protection⁶. The strategy invests in private debt funds and co-investments that finance mid-sized companies’ needs such as buy-outs, expansion and growth, or restructurings.
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Update Magazine III/2020 |
Why invest in the Allianz Global Diversified Private Debt strategy
1
A reliable strategic partner and experienced investor:
Founded in 1890, Allianz is a leading insurance company and asset manager with a strong balance sheet, proven track record and years of experience in actively managing through credit cycles. AllianzGI’s private debt platform allows clients to benefit from the expertise of more than 60 investment professionals, managing more than EUR 35bn6 in private debt.
2
Scale and alignment of interests:
With new investments of more than EUR 3bn p.a., Allianz is one of the largest private debt investors globally. The Global Diversified Private Debt strategy enables investors to co-invest with Allianz. With Allianz providing more than 80% of the capital invested in each transaction, the alignment of interests is very strong.
3
Experienced team with proven track record:
Since 2007 the experienced team of well-connected investment professionals has invested more than EUR 18bn, and generated a strong track record across the credit cycle. We are active LPAC* members and actively manage our investments through their life cycle.
4
Market access:
We cover private debt markets globally via a unique market access that we believe allows for the best possible investment opportunities in the Private Debt space. The portfolio is well-diversified across geographies, sectors, capital structure, styles, vintage years and GPs**.
5
Attractive return at competitive terms:
The Global Diversified Private Debt strategy aims to achieve an attractive risk-adjusted return with significant cash yield. Throughout our investment process the main focus is always on preserving capital, and integrating strong downside protection6 into our investments.
* LPAC: Limited Partners Advisors Committee.
** GP: General Partners.
A/ THE PRIVATE DEBT EXPERTISE OF ALLIANZ AND ALLIANZ GLOBAL INVESTORS
Investment strategy
The Allianz Global Diversified Private Debt strategy provides consistent access to predominantly middlemarket corporate debt throughout the business cycle. The strategy aims to achieve an attractive risk-adjusted return, while providing a high level of diversification across asset managers, geographies, sectors, styles, and vintage years. The strategy focuses on investments in senior secured loans, complemented by subordinated debt as well as countercyclical special situations strategies. The typical loan in our strategy finances a company with EBITDA of EUR 10–100m and has a maturity of 5–7 years (often repaid earlier). Net leverage is typically below 5x EBITDA with a strong equity cushion. J-curve effect will be mitigated through using a seeding facility provided by Allianz.
Portfolio construction
Selecting best-in-class private debt managers is key to the success of the strategy. Given our market access and scale we are uniquely positioned to build a diversified private debt portfolio that is resilient across the credit cycle. Diversification across geographies, segments, vintage years, sectors and company types is key to the success of the strategy. Countercyclical investments are an essential part of the strategy, and enhance its riskreturn profile. Overall, the Allianz Global Diversified Private Debt portfolio is expected to be highly diversified, with exposure anticipated to more than 500 underlying companies.
Investment process
We follow a rigorous due diligence process that is focused on capital preservation and strong downside protection of each investment. As a result, our strategy only invests with asset managers who have proven work-out capabilities across the credit cycle. A sustainable approach is built into all our investments, and we actively drive and shape ESG (environmental, social, corporate governance) criteria. We actively manage all investments throughout their entire life cycle, and follow a long-term partnership approach with ongoing active involvement.
Downside protection
Middle market loans in the strategy are typically unrated, but correspond to sub-investment grade credit quality. Strong structuring capabilities are key to capital preservation and downside protection. The funds in which we invest negotiate customised loan documentation with strong covenant protection. The ability to structure transactions effectively and act as the sole lender is essential, because it allows us to intervene at an early stage and, if required, drive workout processes in the lender's interest. This is key to generating superior results with high recoveries and low loss rates.
B/ TARGET PORTFOLIO CONSTRUCTION
* Size of companies is measured by EBITDA (in millions USD).
6 A performance of the strategy is not guaranteed and losses remain possible
Investing involves risk. The value of an investment and the income from it may fall as well as rise and investors might not get back the full amount invested. The views and opinions expressed herein, which are subject to change without notice, are those of the issuer companies at the time of publication. The data used is derived from various sources, and assumed to be correct and reliable at the time of publication. The conditions of any underlying offer or contract that may have been, or will be, made or concluded, shall prevail. The duplication, publication, or transmission of the contents, irrespective of the form, is not permitted; except for the case of explicit permission by Allianz Global Investors GmbH.
The volatility of fund unit prices may be increased or even strongly increased. Past performance is not a reliable indicator of future results. If the currency in which the past performance is displayed differs from the currency of the country in which the investor resides, then the investor should be aware that due to the exchange rate fluctuations the performance shown may be higher or lower if converted into the investor’s local currency. The statements contained herein may include statements of future expectations and other forward-looking statements that are based on management's current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. We assume no obligation to update any forward-looking statement.
This is for information only and not to be construed as a solicitation or an invitation to make an offer, to conclude a contract, or to buy or sell any securities. The products or securities described herein may not be available for sale in all jurisdictions or to certain categories of investors. This is for distribution only as permitted by applicable law and in particular not available to residents and/or nationals of the USA. The investment opportunities described herein do not take into account the specific investment objectives, financial situation, knowledge, experience or particular needs of any particular person and are not guaranteed. The views and opinions expressed herein, which are subject to change without notice, are those of the issuer and/or its affiliated companies at the time of publication. The data used is derived from various sources, and assumed to be correct and reliable, but it has not been independently verified; its accuracy or completeness is not guaranteed and no liability is assumed for any direct or consequential losses arising from its use, unless caused by gross negligence or wilful misconduct. The conditions of any underlying offer or contract that may have been, or will be, made or concluded, shall prevail.
Contact the issuer electronically or via mail at the address indicated below for a free copy of the sales prospectus, the incorporation documents, the latest annual and semi-annual financial reports and the key investor information document in English. Please read these documents – which are solely binding – carefully before investing.
For investors in Europe (excluding Switzerland):
This is a marketing communication issued
by Allianz Global Investors GmbH, www.allianzgi.com, an investment company with limited
liability, incorporated in Germany, with its registered office at Bockenheimer Landstrasse 42–44,
60323 Frankfurt/M, registered with the local court Frankfurt/M under HRB 9340, authorised by
Bundesanstalt für Finanzdienstleistungsaufsicht (www.bafin.de). Allianz Global Investors GmbH
has established branches in the United Kingdom, France, Italy, Spain, Luxembourg and the
Netherlands. Contact details and information on the local regulation are available here
(www.allianzgi.com/Info).
For investors in Switzerland:
This is a marketing communication issued by Allianz Global Investors
(Schweiz) AG, a 100% subsidiary of Allianz Global Investors GmbH, licensed by FINMA
(www.finma.ch) for distribution and by OAKBV (Oberaufsichtskommission berufliche Vorsorge)
for asset management related to occupational pensions. Details about the extent of the local
regulation are available from us on request.
This report does not satisfy all legal requirements on the guarantee of impartiality in investment recommendations and investment strategy recommendations and is not subject to any trade restrictions prior to the publication of such recommendations. The duplication, publication, or transmission of the contents, irrespective of the form, is not permitted.
AD ID 1196674
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