Allianz Global Investors (AllianzGI) announced today the first close of the Allianz Credit Emerging Markets (ACE) strategy, raising $690 million in commitments for the new fund aimed at mobilizing large scale private investments in support of the goals of the Paris Agreement, and accelerating progress toward the achievement of the UN Sustainable Development Goals (SDGs).
The firm said that it is targeting $1 billion at the final close of the new strategy.
The new strategy utilizes a blended finance structure, which brings together public or philanthropic capital and private funding through a common investment structure, enabling investors to invest in certain types of investments that have high perceived risk profiles, such as new climate mitigation-related technologies.
Under the blended structure, Development Finance Institutions (DFIs) and Multilateral Development Banks (MDBs) will provide junior capital, providing first-loss protection, limiting volatility and enhancing returns, enabling institutional and professional investors to take a senior position.
Allianz CIO Ludovic Subran said:
“The first close of ACE marks an important milestone in leveraging our long-standing expertise in blended finance investments to channel meaningful private capital toward the world’s most urgent sustainability challenges. Emerging markets hold extraordinary potential for both climate progress and long-term value creation, and this strategy demonstrates how thoughtful structuring can unlock that potential at scale.”
According to AllianzGI, the new strategy will invest in a well-diversified pool of private debt instruments in low carbon sectors, targeting investments in clean energy, smart agriculture, sustainable infrastructure, financial institutions, and certain manufacturing activities. The fund will focus on emerging markets globally including Africa, Latin America and the Caribbean, as well as Asia Pacific.
Edouard Jozan, Head of Private Markets at AllianzGI, said:
“Addressing climate change cannot be focused solely on investing in developed markets – launching ACE is a bold step forward in mobilizing institutional capital towards emerging markets to address global development priorities including climate. This strategy is a great example of the power of collaboration between the public and private sector and the significant potential for further scale of investment.”
Anchor institutional investors at the first close include Allianz and Swiss pension fund GastroSocial Pensionskasse, while DFIs and MDBs in the junior tranche include Global Affairs, British International Investment (BII) and the Inter-American Development Bank Invest (IDB Invest).
