UK development fund, British International Investment (BII) has provided an anchor investment to a private credit fund launched by German asset manager Allianz Global Investors (GI).
The Allianz Credit Emerging Markets (ACE) fund, which is targeting $1 billion in capital, has attracted a number of public and private institutions as investors, including BII and other mutual development banks.
Following its first close, the ACE fund has so far raised $690 million with Allianz SE and Swiss pension fund GastroSocial Pensionskasse serving as the anchor investors for the senior tranche of the fund.
The MDBs will provide $150 million of concessionary capital for the junior tranche of fund with BII contributing $40 million.
Other MDBs include Global Affairs Canada, the development agency of Canada, the Inter-American Development Bank Invest, the Swedish International Development Cooperation Agency and Impact Fund Denmark.
The fund is designed to support Paris Agreement goals with a focus on climate finance and is set to be one of the largest ‘blended finance’ funds to date, according to AllianzGI.
Edouard Jozan, head of private markets, AllianzGI, referred to the fund as a “step forward” in terms of mobilising institutional capital to address global development priorities.
“Addressing climate change cannot be focused solely on investing in developed markets,” said Jozan. “This strategy is a great example of the strength and power of collaboration between the public and private sector and the significant potential for further scale in this asset class.”
According to BII, its investment is in line with its strategy to accelerate the flow of private capital for international development.
“BII’s participation in the ACE fund demonstrates how we are modernising our approach to international development, by working as partners and investors,” Baroness Chapman, UK minister for International Development and Africa.
“We are using UK government support to attract more private investment to create a bigger impact – ensuring every pound we invest generates much more funding for countries in the Global South to tackle the climate emergency.”
