“We used to have a multi-boutique model… but Allianz SE decided to concentrate on two asset managers, Allianz Global Investors and Pimco, the fixed income specialist,” said Amine Benghabrit, managing director and head of France & Benelux at Allianz Global Investors.
He explained that AGI oversees €550bn in assets under management that operates fixed income, multi-asset and equity business lines and offers access to “private markets” through its private asset platform which include its subsidiary, Allianz Capital Partners. Starting out with infrastructure debt, the platforms nowadays oversees €90bn in AUM.
As an active management shop, “we do not plan to market passive ETFs,” Benghabrit told Delano during an interview. He is looking seriously at launching active exchange-traded funds, “a business at its infancy with a high growth potential.”
Luxembourg: central location for potential clients and its own operations
According to Benghabrit, ACP manages 1/3 of its AUM for Allianz SE, an investor in its products, 1/3 for institutional investors and 1/3 for wholesale/retail clients. He noted that the Luxembourg office counts 85 employees in support and asset management functions.
Recently assigned the responsibility for distribution in Benelux, Benghabrit quickly pointed out he used to cover the market 15 years ago. Clients in Luxembourg include the Fonds de Compensation.
AGI’s clients include Luxembourg-based insurers given Allianz’s expertise in the Paris office with French insurers. Yet Benghabrit targets Luxembourg for its retail and wholesale potential. As such, he intends to focus on private banks, single and multi-family offices.
Efficient cash management in a private asset fund
Launched in October 2023, Benghabrit explained that its Sicav- core private market fund offers the triple benefit of replicating the performance of a diversified portfolio (private equity, infrastructure equity and debt and corporate loans), not exposing its clients to the thanks to the mature assets on the book and a “reasonable level of liquidity.” The financial power of Allianz SE guarantees the liquidity of the fund up to €3bn for quarterly redemptions, enabling the fund to maintain a low level of cash.
Believing that it is a market first, he commented that the fund replicates, through a total return swap, the performance of the private market portfolio of Allianz Leben, which has more than 10,000 positions that include funds and direct investments.
Competition has come from banking products and direct bond investments instead of Amundi or Blackrock.”
However, nothing comes for free, despite the very high solvency of the group (). In time of stress, the solution may haunt Allianz SE should large redemptions coincide with other liquidity pressure (e.g., margin calls) in the group during a financial crisis. These events are rarely idiosyncratic.
The firm is targeting qualified clients and small institutional clients lacking the scale to buy attractively priced private asset funds. AGI thought about replicating the same structure into Eltifs for retail clients. However, the Eltif 2.0 regulation does not permit the usage of swap instruments. Nevertheless, Benghabrit explained that AGI has achieved significant progress to eventually launch an Eltif focussed on infrastructure (debt and equity) on the back of strong retail demand.
Gradual return to risk taking
Given the higher interest rate environment over the last two year, Benghabrit explained the “competition has come from banking products and direct bond investments instead of Amundi or Blackrock.”
Yet Benghabrit observed that thematic products such as those focusing on AI have gained ground. Besides, its “Thematica” fund focuses on mega trends such as the climate transition with niche sectors, such as the pet economy. AGI noted that animals are not only becoming part of the family but their increased ownership results in a growing demand for health services, food and insurance products. “The sector is broad enough for a diversified portfolio.”
Elsewhere, Benghabrit noted the return of contrarian investors on China given the “broken valuation of several stocks.” AGI noted the development of a Chinese ecosystem on technology that will require clients to make choices between the Chinese and US tech environments. Managing its portfolios from Hong Kong, AGI offers a large spectrum of funds such “China A, onshore, offshore, tech China and thematic China.” Delano recently covered the bright and the dark side of investing in China and .
Candidate for active ETFs
Finally, Benghabrit suggested that its multi-factor/low tracking error products sold under the brand “best style” with €50bn in AUM, offer a “stable allocation between the main [investment] styles such as growth, value, momentum, revision and quality.”
Depending on the strategy, they have delivered an average annual performance of 100bps-150bps since 1998, “the longest track record in the industry.” He sees the product as an alternative to passive ETFs and even admitted its past success makes the product an ideal candidate when launching active ETFs.
This article was published for the Delano Finance newsletter, the weekly source for financial news in Luxembourg. .