Allianz Global Investors (AllianzGI) announced that it has raised €560 million in total commitments for its Impact Private Credit Strategy (IPC) at its first closing, more than half of the total sought for this effort.

Among those investing in the strategy were some of Europe’s leading institutional investors, including Allianz, APG Asset Management, the European Investment Fund (backed by the European Union’s InvestEU initiative), along with investments from two funds sponsored by La France Mutualiste.

The objective of IPC is to provide loans to Europe-based small and medium enterprises whose core business is to provide solutions to crucial environmental and social challenges. Among the SMEs eligible for loans are firms that seek to offer products or services that will have a measurable positive impact on key environmental or social challenges, including solutions that will help provide clean and efficient energy, resource efficiency, as well as sustainable food and agriculture. In addition, IPC seeks to support SMEs that will help provide access to quality, accessible and affordable healthcare and education.

Matt Christensen, IPC’s Global Head of Sustainable and Impact Investing, said:

“The move from ESG to sustainability to impact is the trend of this decade. Impact investing is growing in waves across private markets, going from private equity in prior years to private credit as of today. For us, Impact is about supporting business models that through their products or services, make a positive, significant and measurable difference by meeting a proven need in society or by creating a clear environmental benefit.”

IPC’s investing value proposition is based on AllianzGI’s own proprietary impact framework. The funds are classified under Article 9 of the Sustainable Finance Disclosure Regulation (SFDR).

The IPC strategy is managed by a team based in London, Zurich and Paris, and is a co-creation between the firm’s Development and Impact Credit team headed by Nadia Nikolova, and its Impact Strategy team, led by Diane Mak. This partnership aims to achieve market-rate financial returns for investors while delivering an ambitious impact investing value proposition based on AllianzGI’s proprietary impact framework, the company said.

Alexandra Tixier, Lead portfolio manager of IPC, said:

“The first closing of our Impact Private Credit strategy highlights our added value in the current European direct lending market offering, especially for first time funds. Although impact investing through private debt is relatively new, it is gaining momentum due to regulatory changes, next-gen trends and societal pressure to “do good” with investments. As investors increasingly prioritize engagement towards net-zero, more responsible investments and better transparency, impact investing is emerging as a crucial new allocation trend in private debt.”