Credicorp Capital and Allianz Global Investors have partnered to launch a global equities investment fund as the German group seeks to expand its presence in Latin America.
Credicorp has been distributing Allianz funds since 2012 but its the first time the firms are launching a fund together. Ignacio Montes, head of institutional distribution at the Peruvian firm, said he expects the vehicle to launch within the next month.
Domiciled in Chile and managed by Allianz, the fund will follow the approach of its Best Styles Global Equity franchise, Montes added.
The overarching $17 billion multifactor strategy seeks to exploit risk premiums to deliver higher returns. Allianz's Co-CIOs of systematic equity Klaus Teloeken and Benedikt Henne, along with other managers at the firm, run 58 portfolios under the Best Styles umbrella.
Allianz and Credicorp are targeting family offices and institutional investors looking for an alternative for their core global equities allocation, Montes added.
‘Allianz has a long track record in multifactor investment approach to global equities and I think investors have recognized that expertise,’ Montes said.
Credicorp had filed a preliminary prospectus for the fund with the Chilean market regulator in mid-June, shortly after Citywire Americas reported that the Peru-based firm running more than $8.5 billion in assets in Latin America was set to expand its Ucits range.
Meanwhile, Allianz has been working to cement its presence in Latin America. In addition to Credicorp, the firm already works with Brazilian firm Votorantim Asset since 2014 to distribute its funds in that country.
The German manager is now exploring entering Mexico, said the firm's head of growth markets Martin Keil, who called the project a 'fact-finding mission' and said the firm had no concrete plans at the moment.
Allianz runs its asset management business through Allianz Global Investors, which according to its website manages 501 billion euros (roughly $571 billion) in assets, and through Pimco, which oversees $1.51 trillion.
Allianz's global equities strategy targets five styles: value, momentum, earnings change, growth and quality.
By including the five styles, Allianz seeks to diversify its portfolio to outperform its benchmark by 1 to 2% while maintaining a similar risk.
The managers behind the strategies within Best Styles seek to manage risk for invidual stocks through bottom-up selection to avoid 'neutral or non-rewarding risks' like fluctuations in FX or oil prices, according to the group's website.