Jones: Allianz invests in a whole variety of areas: real estate, shares, infrastructure and corporate and sovereign bonds. However, sovereign bonds in particular have been associated with some insecurity due to the uncertain situation in many European countries. The sovereign debt crisis and the low interest rate environment have made it difficult for us to invest premiums for the long term. But that's exactly our job. Our investment capital comes from Allianz life insurance policies. We are meeting long-term obligations here. That's why we're putting our money on renewables, because they are safe haven in these stormy times.
Also, renewable energies are something of an investment trend because of the general shift in energy generation, right?
Jones: It's true that renewable energies are popular with investors. Seven years ago we were one of a much smaller crowd; today lots of companies have discovered its advantages. But for Allianz renewable energies aren't just some short term trend. Since we started, we've invested about 1.3 billion euros into this growth market. Currently, Allianz owns 34 wind farms and 7 solar farms in France, Germany and Italy. All together they generate enough electricity for 350,000 households in Europe.
The key for us is diversification, which we can offer our investors with our large investment portfolio. That makes Allianz an especially attractive investment manager. That is also why the public rethinking of energy generation won't change anything for Allianz. We're going to continue to expand our investments in renewable energies as planned.
How do you select the objects to invest in?
Jones: Our investment team has a lot of expertise in finance, traditional energy generation and renewable energies. We work as a small team of 10 experts who can draw on many years of experience in development, structuring and managing energy projects. This helps us navigate the still emerging "green" market.
On top of that, a core part of our business model is to invest in 100 percent of the capital of a wind or solar park and to keep them on our books until the end of their operating lives. That differentiates us from our competitors in the market.
Are there growth areas within this sector?
Jones: We are also open for investments in offshore wind, but so far we have not found an opportunity where we consider that the return available properly rewards the long term risk. However, I'm still optimistic that we ultimately will. That said, we would only take a minor stake alongside a major electricity provider who has experience with offshore wind.
In addition to that, we are expecting to expand our investment portfolio geographically. Broadly speaking, we will still concentrate our investments in renewables in Italy, Germany and France, but we're watching other European markets and may invest there if good opportunities come along.
