Exclusive: AllianzGI sets up US infra debt team

Hoping to expand its infrastructure debt platform beyond Europe, the asset manager has sent two executives to New York to test the waters.

Paul David, a director within Allianz Global Investors’ (AllianzGI) infrastructure debt team, relocated from his native UK earlier this month to New York in order to explore opportunities in the US infrastructure debt space. His colleague, assistant vice president Alex Ball, has also been transferred to New York.

“There’s always been an interest in growing the [infrastructure debt] platform,” David told Infrastructure Investor during a phone interview on Tuesday, noting the platform’s rapid rise in Europe since Allianz’s investment arm launched it in 2012. “One of the areas we’ve been looking at, to see if there are opportunities there, is North America and deals in US dollars.”

David, who's been based in London since joining AllianzGI shortly before the firm officially established an infrastructure debt team, has been leading the effort in exploring opportunities in the US.

“I’m here to map out our strategy: to help us understand how we might best translate our existing expertise into the US market and build on our initial success.” David explained.

AllianzGI’s team has been exploring the US market remotely from London for the past year and has already made two investments. The first was in the amount of $700 million in the ITR Concession Company, owner and operator of the 157-mile Indiana Toll Road, which Australian fund manager IFM Investors acquired in May for $5.7 billion.

The second US deal closed in August in the form of $60 million in debt financing for the Next Generation Kentucky Highway Information project, a project in which the state of Kentucky is investing $30 million and partnering with Macquarie Capital to deliver.

Asked whether AllianzGI’s infrastructure debt team will be focusing on specific sub-sectors within the US infrastructure market, David replied: “Our focus may be different in the US from Europe. We are looking to invest in debt in core infrastructure, with long-term, stable cash flows, and the sectors that have these characteristics can be different in different markets.”

AllianzGI launched its first infrastructure debt fund in July 2014. About £120 million (€161.6 million; $181.9 million) have already been deployed from the fund – which has a target of up to £500 million and focuses on UK core infrastructure assets – in the refinancing of a student accommodation project at the University of Exeter in south-west England, announced in December 2014.

Overall, AllianzGI has invested more than €4.5 billion in 14 infrastructure debt transactions in nine countries since 2012, including the M8 project in Scotland, the A11 in Belgium and the L2 bypass in Marseilles.

Currently, the firm’s infrastructure debt team has 15 professionals in London, Paris and New York.