“For long-term savers there are good chances” – Frankfurter Rundschau

05 August 2016

How can you make money in times without interest? The chief investor of the life insurer “Allianz Leben” on meaningful strategies.

with safe investments make money – which is similar in these times of squaring the circle. Even ten-year government bonds do not generate any more interest, but bring savers losses a. This is also the customers of life insurance. For many of them Andreas Lindner is an important man, because their pension depends on whether how well the boss investors Allianz Leben does his job. The he does not come from London, New York or Frankfurt. No, he controls the billions from the life insurance of an office building in Stuttgart. A conversation about his strategies.

Mr Lindner, as chief investor Allianz Life You are responsible for investments of over 200 billion euros. How do you handle it when the morning again bombarded bad news about the Proposed referendum on United Kingdom membership of the European Union or banking crises in Italy on you?
This is part of the business. For 16 years I take care in various locations around the investment strategy of Allianz Leben. As I have already experienced some crises in the financial markets. At Allianz, we have a great advantage. This is our very long-term investment horizon. The short-term fluctuations affect our investment strategy rather less.

Personal

Andreas Lindner is a native of Böblingen, can be his Swabian origin listen but just a little. At the University of Tübingen, he studied business administration. At the Swedish University of Lund, he gained experience abroad.

The 44-year-old is a homegrown Allianz Lebensversicherung AG, based in Stuttgart. Here he began to time at the University in Accounting. Early on, he then joined the investment department of the insurance industry, which he now heads. The father of three children playing in the spare time tennis or reading. (Msv)

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many people are overwhelmed by the many, often very bad news from around the world in quick succession. In addition, there has long been the extremely low interest rates. Was investment sooner easier?
Yes and no. The recent crisis always seems to be the hardest. Severe crises there were earlier. Think. To the Asian or Russian crises in the ’90s, the attacks of September 11 or the financial and euro crisis Then, too, were the uncertainties as to develop the capital markets further, extremely high. What is new is the artificially low by the European Central Bank interest rates. This is all long-term savers and providers of retirement products with new challenges.

long complained the insurer about the low interest rates. Meanwhile, the federal government sold its ten-year bond at zero cost or even negative interest rates. Can not generate yield bonds?
With safe Bunds not. On them earned the federal government, but not the investor. We at Allianz buy for a long time no German government bonds more. Of course, the low interest rate environment affects all areas. But there are segments that offer more attractive returns. This applies for example for infrastructure financing, the run up to 30 or 40 years. We see opportunities in the financing of large-volume commercial real estate, where we partly invest sums of three or four hundred million euros. Here we can clearly generate higher yields than government bonds. Attractive are also certain forms of SME financing, particularly in the US where you can achieve returns of between five and eight percent.

Attach longer maturities, about 30 years, even more profit?
Limited. You get a paper with 30-year maturity about one percentage point more interest than investments over three or four years. Although this is more than minus 0.5 percent for five-year government bonds. But in absolute terms is not really exhilarating.

The interest rates have been falling for two decades, say. Do not they eventually rise again? When?
We expect for the next two to three years no real turnaround in interest rates. Normal fluctuations are always there. But interest rates over two percent, I think in the foreseeable future for not realistic. Also, the Proposed referendum on United Kingdom membership of the European Union referendum in Great Britain has increased the uncertainty, the European Central Bank probably motivate them even longer to maintain its course.

Andreas Lindner: “At Allianz we have a great advantage This is our very long-term investment horizon.”. Photo: PR

The Alliance is increasingly focusing on infrastructure investments. How to choose suitable projects?
We look at long-term stable business models with slight fluctuations of income. Last year we bought a license for the operation of a garrison in England for 35 years by the government. Another example is gas pipelines. The long-term supply contracts with gas producers provide many years of stable income and thus fit very well with our liabilities. Rather reluctant we are in infrastructure projects with increased operator risks.

A year ago, the Alliance is at Tank & amp; Rast, the operator of motorway service areas boarded. Does it make sense to put on a single company? And why this
Tank & amp?; Rest is an investment in our infrastructure portfolio. We currently have eight such investments. This begins with our parking meters in Chicago and continues through the mentioned gas pipelines up to Tideway Tunnel in London. Tank & amp; Rast suits us because the volume of traffic at the service stations and the entire business model are very stable. We also expect the national transport is likely to increase.

What is the return on Tank & amp; Rast?
The returns of projects we do not express ourselves. Basically, we expect in the infrastructure investment returns of between five and eight percent, depending on the risk of the investment.

The interest rates are at or near zero. But at the same time increase assets like real estate or shares enormously. Can life insurance benefit of it?
Definitely. Especially for life insurers to offer these asset classes, because the loss probability decreases with increasing maturity. With the exception of the Great Depression, they have never lost in shares of money if they have this held over 20 years. Regardless, I would not say that stock prices have recently risen sharply. So the rates are in Europe and emerging countries still about 20 percent below the level of a half years ago. full

Well, they are a significant period of five, ten years.
Right. But we also came from an extreme crisis in which shares previously almost 70 percent had lost value. I do not see therefore currently that stocks are overly expensive.

But adjust rates at a record level or close to record levels to the economic environment?
The company in Europe and the United States are well placed. Debts have been reduced in recent years, corporate profits have risen. The courses are justified from a fundamental perspective.

other hand, the low interest rates are a symptom of crisis. Is it non-threatening, if the same share prices have risen so high?
stocks are very volatile asset class. You can lose at any time 20 percent or more. Who does not have the nerve and the financial strength to get through bad phases, should not invest in stocks. Thanks to our financial strength, we can withstand such fluctuations. Incidentally, we see just European stocks on today’s valuations as attractive.

The referendum in Britain shocked the financial markets. Then the situation calmed seemingly quickly. Is already digested in the markets of the Proposed referendum on United Kingdom membership of the European Union?
The first reactions in the markets were enormous. Shortly before the vote indicated all the polls point to a fate of Britons in the EU, which is why prices have risen before the referendum. According clearly the correction was made directly after the vote. Larger impact for the capital markets, we do not see in the medium term, however. Britain will probably see a slowdown in growth. But both the British government and the EU have an interest in negotiating a good transition for both sides.

What can private investors by professionals like you learn?
The private investors must be just like us be clear about the objective he is pursuing. If he places for retirement on or he saves for a home purchase or a car? Then you have to know its limitations: Do I approach regularly to the money? Then I have to invest safely and at short notice. Does not need to be someone capital assets the next ten years, it can take more risks and invest in the longer term.

The Germans still rely heavily on interest and lament the decline of their return. Would you use more risk?
Everyone must know for herself what risk he can wear or want. It is clear that there is hardly return without risk. But as I said, the risk is reduced if someone invests in the long term. For long-term savers, there is still the chance of good returns.

Interview: Markus Sievers

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