Global asset management firm Pacific Investment Management Company (PIMCO) has launched a new bond fund to capitalise on infrastructure spending in developing countries.
The PIMCO Emerging Markets and Infrastructure Bond Fund will invest in fixed income securities used to finance investments in the energy, transportation, water and waste treatment, telecommunications, public housing and development bank sectors.
Brigitte Posch, an executive vice president at PIMCO, will be portfolio manager of the new fund. Posch joined PIMCO last August from Deutsche Bank in New York, where she was a managing director and head of Latin American Securitisation and Trading.
PIMCO said in a statement that with over $1 trillion of infrastructure projects already committed or underway, the bonds that sometimes finance these projects typically offer attractive yields. It added that with many governments giving a high priority to infrastructure development, this may mitigate the risk of such investments, which would in turn limit the fund’s correlation to emerging equity markets.
PIMCO is majority owned by Allianz Global Investors, part of German insurer Allianz Group. In March this year it had $756 billion of assets under management.