Allianz Global Investors has launched the £500 million (US$856 million) UK debt Infrastructure Fund, which is expected to invest in loans of long-term, investment grade, and core infrastructure assets.

According to sources, the fund already has commitments from a number of investors, including Nippon Life,  a Japanese insurance company.

The £500 million UK Infrastructure Debt Fund will allow institutional investors to purchase share of debt, which will finance infrastructure projects including roads, schools hospitals, water and energy assets in the UK.

Deborah Zurkow, chief investment officer (CIO) for infrastructure debt at AllianzGI, stated:

This launch is a significant moment for infrastructure funding in the UK. This pioneering fund will provide UK infrastructure with a welcome, additional source of investment, helping ensure that the assets the government has identified in its ambitious infrastructure programme, including roads, schools and hospitals, become a reality. This new fund will allow the broadest possible church of institutional investors, including small to medium sized pension funds, access to the long-term, stable cash flows projects like this provide.

We are excited to be at the forefront of the development of what is a growing asset class for investors and a new funding market for borrowers and government authorities. As this new market continues to develop and mature we expect to see significantly more institutional investor interest, which will help meet society's need for substantial infrastructure funding.

Over the last twelve months, AllianzGI has invested €2 billion on behalf of its clients into eight infrastructure debt transactions across seven European countries, including the M8, M73 and M74 motorway improvements PPP project, the Rijnstraat 8 PPP in The Hague, the A11 Bruges PPP project in Belgium and the Marseille bypass concession in France.

Allianz GI is the asset management arm of German financial services giant Allianz.