Allianz Global Investors launches second trade finance fund
Allianz Global Investors (AllianzGI) today announces the launch of its second trade finance fund, the Allianz Working Capital Investment Grade Fund (ALWOCA IG). The fund builds on the success of its predecessor, Allianz Working Capital Fund (ALWOCA) that was launched three years ago. The AllianzGI Trade Finance team is managing EUR 500 million from institutional investors across Europe.
The new fund ALWOCA IG will offer investors exposure to ultra short-term trade finance receivables with Investment Grade credit risk and will therefore be accessible for a broad range of investors who have restrictions on high yield rated investments but would like to enjoy the defensive nature of short-dated, diversified, trade finance investments.
ALWOCA IG aims to offer attractive yield, diversification benefits. Its short interest rate duration allows resets to rising rates whilst its short spread duration and no reliance on capital markets seeks to help reduce volatility in case the credit cycle deteriorates.
The Fund builds on AllianzGI’s existing trade finance team and its rigorous investment process. Transactions will be sourced through the existing network of sourcing partners and our established operating platform provides a robust backbone.
David Newman, Head of Global High Yield with Allianz Global Investors, commented, “We are excited to launch this Investment Grade version of the existing ALWOCA fund. We believe the characteristics it offers are particularly relevant to investors today in an environment of heightened geopolitical tensions, volatile bond yields and rising inflation. In this environment, trade finance can offer the flexibility and potential returns to help investors navigate the uncertain outlook.”
Martin Opfermann, Lead Portfolio Manager added: "The launch of this fund further bolsters our trade finance offering for our clients. We believe that ALWOCA IG is a “cash plus” alternative that seeks to stabilise portfolios in today’s world of elevated asset class correlations.”
AllianzGI offers a broad range of investment solutions and manages around EUR 90bn in private market assets.
What is Trade Finance?
In all production and distribution chains, there is a financing gap between the delivery of product and payment. Trade Finance bridges this gap, allowing suppliers to reduce Days Sales Outstanding (DSO) and buyers to maximise Days Payable Outstanding (DPO).
The four main trade finance categories are:
- Payable Finance: acting alongside a buyer, by making payments to their suppliers when invoices are raised. Suppliers receive discounted invoice amounts, and the financier gets repaid under the invoice.
- Receivable Finance: providing money to a single supplier in advance of it receiving invoice payments from several customers. These buyers pay invoices directly to the financier.
- Documentary Credits: common instruments used by companies to finance specific trade flows and payments under commercial contracts. These include Letters of Credit, Bills of Exchange, and Trade Loans.
Allianz Global Investors is a leading active asset manager, managing EUR 578 billion in assets for individuals, families and institutions worldwide. By being active and investing for the long term, our goal is to elevate the investment experience for our clients and generate value every step of the way.
Active is: Allianz Global Investors
Data as at 30 June 2022. On 25 July 2022, AllianzGI completed the transfer of investment teams (including 87 Investment Professionals) and USD 101bn of assets they manage to Voya Investment Management as part of a strategic partnership. Two thirds of the assets continue to be managed on behalf of AllianzGI clients outside of the US.
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