Exclusive: Allianz to close on IFC emerging markets pledge

The German insurer is “very advanced” in efforts to seal its $500m investment through the IFC’s $5bn infrastructure debt platform, which Prudential is also looking to back.

Allianz Global Investors is in the home stretch of enacting its pledge to invest through MCPP Infrastructure, an International Finance Corporation-backed infrastructure debt platform aiming to raise $5 billion from institutional investors.

In the first update since the initiative was launched last October, Claus Fintzen, chief investment officer and head of infrastructure debt at the German asset manager, told Infrastructure Investor that his team was “very advanced in reaching financial close on our $500 million co-investment”, which would make Allianz the first institution to set in stone a partnership with MCPP.

Next in line could be Eastspring Investments, the Asian asset management business of Prudential, and French insurer AXA, both of which were in talks with the IFC when MCPP was unveiled last year. While Eastspring is understood to be nearing a $500 million investment, it is unclear whether AXA has since made progress towards making a similar pledge.

Eastspring, AXA and the IFC had not responded to queries at press time.

The platform’s portfolio is expected to have a 10- to 12-year weighted average life, Fintzen said. He added that MCPP will aim for single-digit returns, “because of the partial risk mitigation” its investments will benefit from. Its remit comprises all emerging market countries covered by the IFC.

The platform’s final portfolio is expected to comprise between 30 and 40 loans, with renewables eligible for up to 40 percent of the total investment.

MCPP builds on the IFC’s Managed Co-Lending Portfolio Programme, a loan-syndications initiative that enables third-party investors to participate passively in the institution’s senior loan portfolio. In its first phase, the programme deployed $3 billion from the People’s Bank of China across 70 deals in less than two years, according to the IFC.

For its part, AllianzGI’s infrastructure debt team is “monitoring emerging markets and at some point will expand [its] mandate”, Fintzen said, noting that this latter move could be executed both through managed accounts and pooled funds.