Infrastructure debt
Infrastructure debt is an asset class for institutional investors that aims to provide long-term stable returns and cash flows. At AllianzGI, we source high credit quality Infrastructure Debt transactions by identifying, differentiating and managing risk.
Our Infrastructure Debt platform has been active in the primary market on behalf of Allianz and third-party clients since 2012. We take pride in our dedicated team’s substantial pre-existing industry relationships and execution experience of infrastructure debt tailored for institutional investors. The team differentiates itself through the sourcing and origination of private placements, innovative financial engineering and the enhanced credibility that our current client base delivers with borrowers.
Market recognition
We are proud to be the recipient of a number of industry awards for our contribution to the sector. Additionally, a number of deals that we have participated in have also won awards. Some of the most recent awards are noted below:
Infrastructure Debt team
Our Infrastructure Debt team is an experienced and well-resourced team with a proven operational platform and investment process. In fact, five of the senior team have been working together since 2004, conducting in-depth analyses of the infrastructure debt market and participating in infrastructure projects. Since the platform was established in 2012, the team has closed numerous transactions across Europe and the US, spanning a variety of asset classes, from PPP to utilities and renewables.
Our investment strategies
Our Infrastructure Debt platform was incepted in 2012, when we initially focused on Core Infrastructure with investment grade features.
In 2017, we expanded the Infrastructure Debt platform into the “crossover” credit spectrum, targeting senior debt on core+ infrastructure assets and junior debt on core infrastructure assets.
The philosophy of the Core Infrastructure Debt strategy is to source secured long-term investment grade debt in core infrastructure, with an attractive pick-up in spread to public debt of an equivalent credit quality. In our opinion, these investments tend to have lower default probability, higher recoveries and lower correlation than corporate debt, particularly over the longer term.
Care needs to be taken in selecting the right investment as not all transactions labelled as “infrastructure” exhibit the same stability of future cash flows. At AllianzGI, we focus on assets that meet the following criteria:
- Essential physical asset
- Long-term stable revenue stream
- Long-term debt
- Clear business purpose
The Resilient Credit strategy is a cross over strategy investing across core and core+ sectors. As the underlying assets will exhibit slightly higher risks, our focus will be on shorter duration assets with an aim to capture higher credit margins compared to the Core Infrastructure strategy. This strategy enables us to match institutional investors looking for medium-term reliable income with the borrowing needs of companies that exhibit resilient business models and are capable of delivering robust gross margins.
Our strategy lends directly to private infrastructure-like asset-heavy companies with a stable medium-term outlook. Our dedicated and experienced team originates and structures transactions, which demonstrate monopolistic or oligopolistic characteristics, high barriers to entry and strong revenue visibility over the term of the transaction.