Allianz is reportedly in preliminary discussions to acquire Capital Four, a Copenhagen-based European credit manager, according to sources familiar with the matter, as reported on by Bloomberg. The talks are still in the early stages and may be subject to delays or may not proceed to completion, the sources added. Representatives from both Allianz and Capital Four declined to comment on the matter.
Capital Four, established in 2011, manages over €23 billion in assets across various credit strategies, including approximately €8 billion in private credit. The firm's portfolio encompasses investments in senior loans, high-yield bonds, and structured credit, catering to institutional investors seeking diversified fixed-income solutions.
The potential acquisition aligns with Allianz's strategic focus on expanding its private credit capabilities. Allianz Global Investors, the asset management arm of Allianz, has been actively enhancing its private credit offerings. In October 2023, AllianzGI launched the Allianz Core Private Markets Fund, a semi-liquid strategy providing professional investors access to a diversified portfolio across private equity, corporate private debt, and infrastructure, with a target fund size of €3 billion. Additionally, AllianzGI's Impact Private Credit strategy reached €560 million in commitments at its first closing, focusing on investments that address environmental and social challenges
The interest in Capital Four also reflects a broader trend among insurers seeking to enhance their exposure to private credit strategies. These strategies offer higher yields and align well with the long-term liabilities typical of insurance companies. For instance, UK life insurer M&G Plc acquired a majority stake in Stockholm-based P Capital Partners earlier this year, while Legal & General Group Plc holds a minority stake in Pemberton Asset Management.
Allianz’s share price declined in May following the release of its first-quarter financial results, which showed a 38% increase in non-operating expenses. The rise in costs overshadowed what was otherwise a record-breaking operating profit for the Munich-headquartered insurer. Despite the drag from higher expenses, Allianz reported net inflows across its two main asset management arms - Pacific Investment Management Co. (PIMCO) and Allianz Global Investors.
In a May interview, AllianzGI CEO Tobias C. Pross reaffirmed the company’s strategic commitment to growing its footprint in private markets. He noted that AllianzGI is open to pursuing acquisitions as part of its broader expansion plans.
