Despite the disruption caused by the Covid-19 pandemic, the active investment manager sees growth opportunities in sectors such as telecommunications, pharmaceuticals, health care, data centers, logistics, specialty chemicals and essential consumer services.
With ample credit available, Allianz Global Investors' (GI) Asia private credit team sees opportunities in several sectors, and has been actively sourcing and deploying capital in Asia with a robust pipeline, said Sumit Bhandari.
«While a lot of banks and existing lenders are willing to provide waivers and persist with the status quo, we have seen a pick-up in need for solution capital from potential borrowers. Capital and for the most part non-dilutive capital that adds value to a company’s long-term strategic objectives is solution capital and that is in high demand,» the managing director and lead portfolio manager, Asia private credit told finews.asia.
Investment Growth
Since its establishment in late 2018, Allianz GI’s Asia private credit team has successfully deployed capital in its target markets of Southeast Asia, South Asia and Oceania, with completed transactions to date now exceeding $300 million. The firm focuses on performing middle-market companies, and counts Australia, India, Indonesia, Singapore and Vietnam as its tier-one markets.
«Our thinking and approach to investing has been consistent. We invest in businesses that are driven by exposure to underlying fundamental demand that is resilient and long-term and we provide those businesses or companies with capital structures that are fully funded,» Bhandari said.
«We remain open to supporting high-quality sponsors and companies with solid, long term fundamentals with flexible capital to ride out the difficult environment, at a time when traditional capital sources are tightening or becoming more risk-averse,» he added.
Growth Sectors
As economies gradually recover, Allianz GI is looking to continue to invest in businesses that will see limited impact on their end demand, such as telecom towers, pharmaceuticals, data centers, or sectors that will show a quick recovery, such as healthcare, education, business software.
«Our base case is that most businesses will get negatively impacted but the impact is a demand-side shock that will manifest itself in weakened profitability and elongated working capital days,» Bhandari said.
«Our ability to lend across potential borrowers’ capital structure allows us to act as one-stop-shop for private credit and structured lending in Asia. We have an experienced team that knows the borrowers it lends to intimately and can act quickly when the opportunity presents itself.»
Expanding Team
In tandem with its investment growth, the Asia private credit team has expanded to seven members. The firm added senior investment analyst Ankur Agarwal in July 2020 and investment analyst Jun Wei Ong in October 2019. Agarwal joined from Credit Suisse, having previously worked for Edelweiss and Deutsche Bank. Ong joined from Bank of America Merrill Lynch, where he was an investment banking associate.
Allianz GI has over 780 investment professionals in 25 offices worldwide and manages more than €510 billion in assets for individuals, families and institutions.
