Alternative assets have grown in prominence as insurers hunt for extra yield in a prolonged low rate environment. But the umbrella term 'alternatives' encompasses a wide range of sub-asset classes each with its own challenges. Finding the right partner to navigate these muddy waters is essential for insurers.
Allianz Global Investors (AllianzGI) launched its alternatives platform in 2012 with €3bn ($3.3bn) of assets under management. Today, the platform manages €80bn across a range of strategies, including equity long/short, merger arbitrage, volatility, global macro and many more.
However, the three stand-out strategies that caught the eyes of the judges were trade finance, infrastructure debt and infrastructure equity.
In 2019, the asset manager launched the Allianz Working Capital Fund, a short-term alternative credit strategy with expected returns similar to BB high yield, but with minimal duration, low correlation to other asset classes, and a low capital charge for Solvency II (SII) clients.
AllianzGI built a €15.3bn global infrastructure debt platform for investors who wish to manage the duration gap with their liabilities while capturing potential SII capital relief.
In 2019 Allianz Capital Partners, part of AllianzGI, launched its first infrastructure fund, which had its final close within nine months at €860m.
Judges praised a "deep knowledge of insurance business and regulation" through a "good diversified portfolio of alternatives solutions" which are "well-considered strategies for insurers".
Leon Douch, director and head of insurance UK at AllianzGI, said: "AllianzGI is delighted to have pioneered solutions that make trade finance easily accessible to institutional investors such as insurers by offering them access to a number of sourcing partners. This rapidly evolving and dynamic market allows insurers to unlock a new SII friendly asset class that provides unique, short-dated, uncorrelated cash flows with an excellent return on risk capital."