Wealth & Finance International - Fund Awards 2015

www.wealthandfinance-intl.com 19 The Allianz Renewable Energy Fund, a pooled SICAV-SIF vehicle domiciled in Luxembourg and our flagship product, was Allianz Global Investors’ first infrastructure equity product. It was set up in the first quarter of 2013 and closed with an overall equity volume of roughly EUR150m in September 2013. Within only one year (instead of the full investment period of 3 years) we managed to nearly invest all the equity in various wind onshore and solar parks in Germany, Italy, France and the UK with an overall capacity volume of 248MW. With this capacity, almost 100.000 4-person-households can be provided with electricity for a period of one year. To ensure the success of our fund, the acquired assets are constantly monitored and supervised by our asset controllers and technical experts. Therefore, in case of any interruptions, we can take necessary measures quickly and at a very early stage so that damages can either be prevent- ed or kept very small in most of the cases. However, just as important as the post-acquisition management of the acquired assets is the thorough research, preparation and set-up phase as well as the effective due diligence, negotiation and acquisition phase. Infrastructure equity is a very challenging asset class in which small mistakes and inadvertency can have major impacts. Finding, examining, acquiring and managing infrastructure assets on a long term basis requires in-depth expertise and active management in order to outperform. As a company immersed in the European markets, we have found that the competition for attractive assets is getting more intense. Accordingly, the ability to source assets which provide for an attractive risk-return ratio will also be key in the future. Given our strong network and in addition our unique cooperation with the insurance units of Allianz we are positive to be able to continue to source the required assets in the future as well. Infrastructure equity provides a range of opportunities for investors. At the moment, it currently offers three main types of funds: pooled vehicles for multiple investors, club vehicles for a small group of investors, and segregated accounts which are tailor-made funds for single investors. Especially in times in which returns in traditional asset classes are diminishing and volatility increases, infrastructure equity is able to combine high return levels in a stable risk environment thus providing for cash flows which are low correlated to the stock markets. This proves to be very attractive for institutional investors which therefore, over the last years, have increased the percentage of their investments in illiquid assets like infrastructure equity. In order to create sustainable outperformance, in-depth market knowl- edge is essential. Our broad and diversified global network is the base of our investment decisions and key to creating a sustainable advantage for clients. We fundamentally believe that especially in our asset class direct access to the markets and projects is essential for everything we do. Therefore we constantly screen local markets, not only in Europe but also for example in Asia. Furthermore, the availability of cheap debt financing on a non-recourse project finance base leads to high asset prices being paid under the use of low levels of equity. Therefore, it became increasingly important to source assets as an asset manager who prefers to avoid aggressive use of debt. We were able to continue our strategy on the basis of a conser- vative use of debt within this environment which makes us very proud. As well as keeping up to date with current trends, communicating with our clients is also vitally important to us. The key to providing excellent service is understanding each client’s unique circumstances and acting in their best interests. We focus on distinct areas where we believe we can excel, helping us align our strengths with our clients’ goals. Our mission is to set up fund vehicles in a regulated area which invest in real assets. Accordingly, within the strategy we follow, we have to be on top of regulatory developments with regard to the structuring of fund vehicles which are investable for regulated investors. The vehicles invest in regulated environments in different jurisdictions, and resulting from that we need to be capable of understanding and anticipating specifics of the target markets allowing us for long-term planning. Last but not least, we must understand the abilities of our target invest- ments to deliver as required from a technical and commercial point of view. In order to do all that, we keep a close eye on the markets we are investing in. We source information on the ground by using the leads we get from our trusted partners but also from the insurance colleagues within Allianz which are based in all the countries we invest in. When you’re making investments in projects which last for charter , it is important not to underestimate the risks involved. Regulatory and economic conditions play a key role in the renewable energy sector. The technical risk analysis of the projects, however, is also crucial when it comes to ensuring investment success for our customers. There are many different areas in which special expertise is required to ensure that individual project components in different countries are assessed correctly. This is why our close collaboration with Allianz is a decisive advantage. As a member of the Allianz Group, we have access to an international network of excellent in-house specialists and their connections to specialized technical experts, project developers and manufacturers. This puts us in the best possible position for meeting our customers’ demands. At Allianz Global Investors, we follow a two-word philosophy: understand and act. It describes how we look at the world and how we behave. We aim to stand out as the investment partner our clients trust by listening closely to understand their challenges, then acting decisively to provide them with solutions that meet their needs. In addition, as the team works together for a long term and we are all thrilled to work in the infrastruc- ture equity sector especially focusing on renewable energies, we have a very strong spirit already and by winning the award we are glad that this is noticed also outside of our company and our customers. Providing such a high standard of service for our clients is very reward- ing, and likewise my team and I feel honoured to be selected as winner of this important award. It really shows that hard work and dedication pay off in the end and that we made the right decisions. The reasons behind our success are, among others, a combination of a great team spirit, an allocated 60 years’ of expertise in the energy market, as well as technical, legal and regulatory know-how. And of course, having a strong brand and partner such as Allianz Group behind us was a vital for achieving this success. From our perspective, the award confirms that expertise and respon- sibility in asset management challenges is essential to be successful. For other market participants and investors, they can possibly serve as a benchmark and a first indication of a reliable partner that is able to outperform and deliver premium service. Looking towards the future, we were asked by our customers to continue our approach and set up further vehicles within the AREF Fund Family, something we are very glad to do and accordingly we will continue our approach on the back of our successful strategy in the near future.

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