Asset manager Allianz Global Investors (AllianzGI), part of Allianz, has set up a new unit focused on ‘impact’ investing in private markets, as part of a sustainable investing drive.
AllianzGI, which manages around 647 billion euros in assets, will look to invest in private companies helping solve environmental or social issues in a measurable way, it said in a statement.
Interest in companies performing better on such measures has surged in recent years as more investors expect such investments to reduce risk and drive stronger returns, particularly as the world transitions to a low-carbon economy.
Impact investing, meanwhile, takes that a step further by tracking the impact of the investments on people and the planet, not just the company’s returns.
The new team of 12 will be overseen by Matt Christensen, global head of Sustainable and Impact Investing, AllianzGI added.
“Investors want to see a positive change for the planet while generating a return, and impact investing offers a solution to these twin goals,” Christensen said.
AllianzGI said it was also creating a new “Impact Measurement & Management” team, led by Diane Mak to help select the investments and assess their impact.
“The future growth trajectory of impact investing depends on asset managers demonstrating how the impact can be measured and reported,” Christensen said.
AllianzGI’s announcement comes as Tibetan activists demand that the group drop its sponsorship of the Beijing Winter Olympics over allegations of human rights abuses in China.
Allianz said it had been in contact with activists and that it was committed to supporting the values of the Olympics.
How it works
AllianzGI said the Impact framework enables the Impact Investing Team to consistently assess impact materiality across private markets asset classes and investment strategies prior to investment, track and update the assessment based on data throughout the investment lifecycle, and engage accordingly to support impact delivery.
Two main aspects of impact are assessed within the Impact Rating Framework. The Enterprise Impact Rating assesses the impact of the enterprise or portfolio that AllianzGI invests in – either directly or indirectly via a fund manager – and is aligned with the Impact Management Project’s five dimensions of impact: who, what, how much, contribution of the enterprise, impact likelihood.
The Investor Contribution Rating assesses the contribution that AllianzGI and other investors bring in supporting investees’ impact generation. The investment’s Overall Impact Rating is then incorporated into the investment decision-making process. Additionally, the Impact Rating assessment informs the selection of impact metrics (aligned with the United Nation’s Sustainable Development Goals and the Global Impact Investing Network’s IRIS+) that are tracked and reported to demonstrate how the investments are meeting clients’ impact goals.