AllianzGI eyes Asian demand for alternatives
Allianz Global Investors, the fund management arm of German insurer Allianz, is seeking to build out its alternatives business in Asia, after consolidating several boutiques under one roof last month.
Spencer Rhodes, London-based global business manager for the new division, is looking to hire in Asia, but he declined to provide specific numbers.
Long/short equity products will be the focus globally in the near term. AllianzGI's Asian alternatives capabilities are focused on Hong Kong-managed long/short strategies and a Singapore-based Asian real estate investment trust fund.
The firm plans to launch an Asia long/short fund in the first quarter to add to its 120/20 and market-neutral strategies. This will give its portfolio managers more freedom to short the market, said Rhodes.
The firm is also considering developing a Ucits fund-of-funds product. “A big trend in the industry is that Ucits are taking market share from Cayman funds and limited partner-type structures, at least outside the US,” he said.
Most of AllianzGI’s alternatives strategies are in Ucits structures. Such so-called liquid alternatives products have been growing in popularity in Asia as they offer access to more investors, but some market participants say constraints on such strategies will put a drag on performance, as reported.
The fund manager is also partnering with its parent insurer Allianz to launch illiquid alternative products. Private debt is the most recent example. The group hired a team and seeded a strategy last year, but it is not yet open to external investors.
AllianzGI's other illiquid strategies, such as infrastructure equity and infrastructure debt, have a longer track record and have consequently attracted third-party investors, including some in Asia.
Rhodes said several of the firm’s alternative funds had enjoyed strong Asian interest, with inflows coming mostly from Japan.
AllianzGI’s global alternatives AUM has grown by some 10%, or €600 million ($678.7 million), over the past two-and-a-half months, from €5.4 billion to €6 billion. Its overall alternatives AUM more than doubled from €2.1 billion in October 2013 to €5.4 billion in Octobr 2014. Rhodes declined to break out the Asia figure.
In January 2012, Allianz Asset Management was formed as the holding company for two investment management businesses, AllianzGI and Pimco. A number of boutiques with alternatives capabilities stood separately under the global AllianzGI management structure. This comprised three pillars: equity, fixed income and multi-asset. Alternatives was added as a fourth pillar in December 2014, to integrate the separate boutiques.
Prior to Rhodes' new role, he had worked as an adviser to AllianzGI since joning in July 2013.