The Pensionskasse and the provident fund (Vorsorgekasse) of Allianz in Austria are looking to invest in impact funds sometime this year, as ESG gains further importance in the firm’s investment portfolios.
“We have set ourselves the goal of investing more in impact funds from 2023 – for example we have committed to an impact infrastructure fund at the beginning of the year,” Andreas Csurda, member of the management board of the pension funds, told IPE.
The provident fund, with assets under management of €2.2bn at the end of June, wants to further expand allocations to sustainable forms of investment with a focus on UN Sustainable Development Goals, he added.
The Pensionskasse, with assets under management of €1.1bn at the end of June, is also investing in line with ESG standards.
“In real estate in particular, but also in other asset classes, only products that meet our ESG exclusion criteria are added to the [Pensionskasse] portfolio. Products explicitly labelled as impact funds or as type 8 or 9 of the SFDR [Sustainable Finance Disclosure Regulation] are primarily analysed and considered,” Csurda explained.
In real estate and infrastructure the Vorsorgekasse excludes investments in fossil fuel companies, and companies responsible for serious violations of the UN Global Compact.
Asset allocation and performance
In the first half of the year, the Vorsorgekasse saw some tactical adjustments made to its asset allocation, increasing the share of held-to-maturity bonds, an asset class that has become desireable again for investors.
The provident fund invested 35% of its total assets in held-to-maturity bonds, 13% in cash, 4% in high-yield bonds, 11% in equities, 10% in real estate and 27% in mark-to-market (MTM) bonds, according to its 2022 financial statement.
The Pensionskasse has instead increased the share of passive equity investments.
“In times of unavoidable negative years for investments, it is important to keep an eye not only on the performance but also on the fees and charges of the individual products,” Csurda said.
A large number of members of the Allianz Pensionskasse has opted for existing life phase pension models, which offer a choice of different investment strategies with clear risk profiles.
So far this year, the Vorsorgekasse returned 1.5%, recovering from the -8.18% recorded last year, and the Pensionskasse returned between 1.1% and 3.2%, depending on the investment strategies. The positive performance is primarily due to returns on equities and bonds.
“Held-to-maturity bonds also had a positive impact [on performance], while the market environment for real estate and infrastructure funds is difficult due to rising interest rates, which means that the returns here are not noticeable,” Csursa said.