Boston, MA, November 23, 2012 - The news that Europe’s largest insurer is increasing its investment in alternatives has been welcomed by Alternative Asset Analysis (AAA).
Allianz claims that its traditional investments are delivering very low yields at the moment, and it is hoping that doubling its exposure to alternatives will help to offset the effects of this.
Currently, Allianz’s investment portfolio totals some $400.8 billion, which, according to AAA, are invested almost entirely in fixed income securities, which have suffered as a result of the financial crisis, with yields falling significantly. “This has happened to a large number of traditional asset classes since the economic crisis,” explained Anthony Johnson, AAA’s analysis partner.
He added, “It’s no longer just individuals that are looking to invest more in alternatives, but institutional investors are also increasing their exposure to alternatives to try to reduce the risk in their portfolios.”
Maximilian Zimmerer, a board member at Allianz spoke to the Financial Times about the issue. He said that Allianz will continue to invest in private equity but will also aim to increase its exposure to infrastructure and real estate property loans, for example.
The move from investing in real estate directly, to investing in property loans is the result of some predictions from Allianz that this area will see the most growth in the coming years. An article on the investment strategy from Invezz.com, explained, ‘A lengthy period of low returns has affected insurers’ ability to generate profits on their conventional investment portfolios while meeting promises to owners of products such as life assurance policies, which often guarantee fixed returns.’
AAA is an alternatives investment advocacy group that supports ethical and non-traditional asset classes, such as forestry and impact investing. “Investing in sustainable plantations though firms like Greenwood Management can produce better returns that most traditional investment," claimed Mr Johnson.
Alternative Asset Analysis
71 Commercial St
Boston, MA 02109-1320