Thomas Pütter has been head of Allianz Capital Partners (ACP) since 1998. ACP is a growth and leveraged buy-out company based in Munich. He is also Head of Allianz Direct Private Equity Activities.

David Jones has been head of Allianz Specialized Investments in London since October 2004. Allianz Specialized Investments is an Allianz Direct Private Equity activity with a different investment approach: building a long-term portfolio in renewable energies, mainly in wind energy. Previously, Jones led Shell's global wind power business, building it up from scratch to seventh largest in the world in less then four years.

Pütter: Investments in renewable energies, especially wind, offer a high yield with an acceptable risk profile. They will generate an attractive annual income stream. You can hold them for more than 20 years, which is ideal for life insurance money.

In May 2004, we bought Hansen Transmissions for ACP. Hansen is today the leading independent gearbox manufacturer for wind turbines and growing significantly.

That was the first time that we had contact with the renewable energy industry. We were introduced to it by members of Dresdner Bank’s renewable energy team who are now part of Specialized Investments. During the process of making that investment, we were absolutely captivated by wind energy. We finally decided to set up a special entity for renewable energy.

Jones: Wind power is our primary investment focus. We're looking at several types of investments, ranging from acquiring equity in large portfolios of wind farms to individual project acquisitions, and also options on future projects.

Jones: We are working on a list of very interesting opportunities all around Europe, analyzing all projects very carefully. Our first investment could happen before the end of the year, but we are not under pressure and very flexible. The only thing we're not flexible on is whether it's a good investment.

Pütter: All our money comes from Allianz Group entities, probably from a wider, more international investor base than ACP's funds. This is also why we decided that this initiative should have a separate identity. It's all very exciting; the interest within the Group is very high.

Pütter: Allianz Group has planned to put 300 to 500 million euros to work over the next five years. To put that into perspective: ACP has invested about two billion euros so far, which is only a small part of Allianz Group's own assets of almost 500 billion euros.

Jones: The average size of an investment will probably be around 50 to 100 million euros. But we're also interested in finding larger portfolios of around 200 to 250 million euros.

Pütter: As this thing becomes successful and grows, and I have no doubt that it will, there is more money forthcoming from within Allianz Group.

Jones: Our aim is to be the financial investor of choice. Many longer-term industrial investors are looking for financial partners. We want them to knock on our door first. That will be on the basis of the strong corporate reputation, and also the knowledge and integrity of our team.

Pütter: The contribution a financial partner makes consists of three elements: the volume of money, his expertise and his flexibility.

We are a very flexible investor who can tailor the investments to suit. Simply put: Unlike an investment fund, Allianz Group just needs to make sure that the risk-return profile is acceptable for its investment. A fund always has rules that are a compromise between investors' different interests. We don't have any of that.

Our combination of size, knowledge and flexibility is unique in the market. We should be able to become the most desirable partner.

Jones: There are many interesting markets. In Spain, which is already a well developed market, the government remains highly committed to wind energy and strong growth continues. France and Greece are both markets that are just starting out and look very promising. Italy and the UK have also very strong prospects – the UK in particular because it has such good wind resource. All these countries’ governments are committed to encouraging the growth of wind energy.

Pütter: Germany, the wind energy pioneer, is already quite saturated. But there's still a lot of capacity being built and that will continue for the next few years. I personally believe we will make some investment in Germany.

But we really didn't go into this business to invest just in Germany. The real action these days is in other European countries and America.

Pütter: They have just passed very important tariff legislation for the next two years which means that this market is exploding. We are looking at that market but would need dollar funds, because we don't want to take the exchange rate risk.

Jones: We started with a small core team from Dresdner Kleinwort Wasserstein. Since then, I have hired several experienced professionals, for example a former analyst from Standard Chartered Bank and three senior managers - one from my old team with Shell WindEnergy, one from leading wind farm developer Renewable Energy Systems and one from Eurus Energy, the Japanese-owned global wind farm asset owner.

We will eventually have a team of ten hand-picked professionals which will be enough for the first stage of our development.

Jones: We will also look at other technologies, such as hydro or solar energy, if we see good opportunities. But certainly the vast majority will be in wind, at least for the next few years.

In renewable technologies other than wind, it remains to be seen what the real game will look like. Both solar and wave power technologies for example are developing quite rapidly in several different directions. When one dominant technology becomes apparent, the equivalent of the three-bladed horizontal-axis wind turbine, these technologies will be more mature and may become very interesting for us.


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