Allianz to increase infrastructure investments

Europe’s largest insurance company could double its investments in infrastructure and other alternative asset classes – such as private equity and real estate – to €30bn. The new strategy aims to counteract lower returns on traditional investments.

Allianz, Europe’s largest insurance company, told the Financial Times that it plans to substantially increase its investments in infrastructure and other alternative asset classes.

Allianz: wading
deeper into

The shift could see Allianz double its investments in infrastructure, private equity and real estate to €30 billion, Paul Achleitner, Allianz’s board member in charge of finance, told the FT. Achleitner is reported to be particularly interested in targeting energy infrastructure. The group is currently bidding to buy Vattenfall’s German grid in a consortium with Goldman Sachs and RREEF and manages a 450 megawatt wind turbine portfolio stretching from Italy to the US.

An Allianz spokesman confirmed to InfrastructureInvestor that the group, through private-equity subsidiary Allianz Capital Partners, intends to increase its allocations to infrastructure but does not have a specific target-size or timeframe in mind for the sector.

Allianz manages some €400 billion of client capital in insurance policies. But lower than expected returns in traditional investments such as bonds are leading the group to seek better results from less liquid assets. Achleitner said Allianz had the advantage of having “a very long-term investment horizon”, which makes it particularly suitable for these asset classes.

It currently holds about €8 billion of private equity investments with a further €7 billion of investments in other alternative asset classes. Almost 10 percent of the Allianz’s investments are in equities with the group targeting returns of between 4.5 percent and 5 percent.