Allianz Global Investors has recruited an infrastructure loan investment team from London's Trifinium Advisors, to satisfy its institutional clients' hunger for long-term income higher than the insufficient income from their core long-dated sovereign debt investments.
Allianz Global Investors has recruited an infrastructure loan investment team from London’s Trifinium Advisors, to satisfy its institutional clients’ hunger for long-term income higher than the insufficient income from their core long-dated sovereign debt investments.
The team is led by Deborah Zurkow, who was Trifinium’s CEO, and head of public finance for EMEA at MBIA Inc. Her team has originated and managed over €10bn of infrastructure senior debt, without credit losses from the activity.
The team often managed the exposure from construction to mature operations, AllianzGI said today.
The German asset manager expects significant demand from insurers, foundations, pension funds and “other investors with long-duration liabilities seeking investments with stable cash flows and risk-adjusted returns”.
With German 10-year Bunds yielding 1.45% and equivalent length Treasuries 1.59%, one fund buyer at a recent industry conference said: “We’ll need to get more than that to do our job. Core debt is safe in the short term, but hopeless in the longer term.”
Pensions typically need 4% to 6% a year to meet long-term goals.
To provide this, Zurkow’s team will focus on investment grade debt, initially for projects mainly in Europe, both for Allianz and third-party clients.
Andreas Utermann (pictured), global chief investment officer of AllianzGI, said: “For investment managers to effectively fill the funding gap created by the retreat of banks from this area of investment, it is critical to have deep expertise in the field of infrastructure debt and the risk profiles of different projects.
“That is why we are so pleased to be welcoming Deborah Zurkow and her team to the firm. With their track record of successful origination, we are confident of identifying the long term investment opportunities that our clients are seeking.”
Zurkow, CIO of infrastructure debt at AllianzGI, added: “Whether it be developing economies building new infrastructure for the first time or OECD economies replacing outdated existing infrastructure, the projected capital requirements for infrastructure investment over the course of this decade and next are considerable.
“In OECD countries alone, annual investment requirements are projected to rise from $700bn to $1trn between now and 2030.”