AllianzGI’s Impact Private Credit strategy reaches EUR 560mn total commitments at first closing

• With EUR 560mn commitments received from leading European institutional investors, including Allianz, APG Asset Management, the European Investment Fund (EIF), and La France Mutualiste as anchor investors, AllianzGI’s Impact Private Credit strategy (IPC) has reached more than half of its target size within a few months.
• IPC offers impact direct lending solutions (mostly unitranche) to European SMEs and small to mid-market companies whose core business is to provide solutions to crucial environmental and social challenges.
• IPC’s investing value proposition is based on AllianzGI’s proprietary impact framework and the funds are classified Article 9 under Sustainable Finance Disclosure Regulation (SFDR).

Allianz Global Investors (AllianzGI), one of the world’s leading active investment managers, today announced the first close of its Impact Private Credit (IPC) strategy after securing EUR 560mn total commitments from leading institutional investors including Allianz, APG Asset Management, the European Investment Fund (backed by the European Union’s InvestEU initiative) and La France Mutualiste across two funds. With these commitments, IPC has rapidly reached more than half of its target size. The funds are classified article 9 under the Sustainable Finance Disclosure regulation (SFDR).

Through direct lending instruments, the IPC strategy aims at accompanying the development of impact champions that are providing solutions to societal challenges with a focus on three core themes: climate change, planetary boundaries and inclusive capitalism. Targeted companies – European small to mid-market corporates – seek to offer products or services that have a measurable positive impact on key environmental or social challenges. On the more environmentally focused investments, solutions include clean and efficient energy, resource efficiency, sustainable food and agriculture. On the social side, solutions are oriented around access to quality, accessible and affordable healthcare and education.

The IPC strategy is managed by a team based in London, Zurich and Paris. It is a co-creation between the Development and Impact Credit team headed by Nadia Nikolova and the Impact Strategy team led by Diane Mak. This partnership aims to achieve market-rate financial returns while delivering an ambitious impact investing value proposition based on AllianzGI’s proprietary impact framework. Dedicated impact experts work independently from the investment team to assess investment opportunities for positive, significant and measurable impact . IPC will deliver transparent impact and sustainability reporting, accompanied by broader impact management throughout the lifecycle of the investments. Additionally, in collaboration with anchor investors, AllianzGI structured the two funds with an impact-linked performance fee mechanism, linking a proportion of remuneration to the achievement of specific impact targets in addition to the requirement of the financial hurdle being met.

Alexandra Tixier, Lead portfolio manager of IPC commented: “The first closing of our Impact Private Credit strategy highlights our added value in the current European direct lending market offering, especially for first time funds. Although impact investing through private debt is relatively new, it is gaining momentum due to regulatory changes, next-gen trends and societal pressure to “do good” with investments. As investors increasingly prioritise engagement towards net-zero, more responsible investments and better transparency, impact investing is emerging as a crucial new allocation trend in private debt.

Matt Christensen, Global Head of Sustainable and Impact Investing, remarked: “ The move from ESG to sustainability to impact is the trend of this decade. Impact investing is growing in waves across private markets, going from private equity in prior years to private credit as of today. For us, Impact is about supporting business models that through their products or services, make a positive, significant and measurable difference by meeting a proven need in society or by creating a clear environmental benefit”.

Edouard Jozan, Head of Distribution Europe added: “Client interest in impact investing continues to grow and evolve across private markets, expanding from the equity focus in prior years to the credit market of today. Allianz Global Investors is keen to provide its clients with new vehicles focused on investing in solutions addressing environmental and social challenges which also meaningfully integrate impact measurement and management throughout the investment process.”

Marjut Falkstedt, Chief Executive of the EIF commented: “We are pleased to support this new fund addressing the unique financing needs of impact-driven SMEs, which is aligned with the goals of the EIF and the InvestEU initiative. We are keen on supporting the growth of companies whose products, services, and business practices contribute positively to social and environmental matters. Together we are paving the way for a more sustainable future for all.”

Menno van den Elsaker, Head of Alternative Credits & Marcin Lenart, Expert Portfolio Manager – Alternative Credits at APG Asset Management commented: “Impact investing within the private credit market is still in its infancy but is developing rapidly. Given the ambitious impact goals of APG’s pension fund clients ABP and bpfBOUW, APG intends to be at the forefront of these developments and to establish leading impact investing practices. With AllianzGI we have found a partner that has one of the most advanced and thorough frameworks for assessing impact in potential private credit investments, ensuring the integrity of impact across the investment lifecycle and proper outcome impact metrics reported to investors”.