Axa SA (CS), Europe’s second-largest insurer, plans to invest 10 billion euros ($13.3 billion) in infrastructure debt over the next five years as low interest rates push European insurers to seek new investments.
Axa will invest through the real-estate business of its Axa Investment Managers unit, the Paris-based insurer said today in a statement. Axa Real Estate will underwrite loans of as much as 500 million euros, it said.
“It meets our need to find long-term investments and diversify our credit portfolio in order to match the guarantees we offer clients,” Axa’s chief investment officer, Laurent Clamagirand, said in the statement.
Axa, like French rival CNP Assurances SA and Zurich-based Swiss Re Ltd., is shifting new investments toward corporate and infrastructure debt following Europe’s sovereign-debt crisis. Axa, which had 491 billion euros of invested assets at its insurance operations at the end of 2012, targeted 40 percent of new fixed-income investments to corporate bonds, 30 percent to government bonds and 7 percent to loans, it said in February.
Axa rose 1.5 percent to 16.08 euros by 10:24 a.m. in Paris trading, and has gained 21 percent this year, reaching a market value of about 38.5 billion euros.
“Axa Real Estate has already identified a strong pipeline of potential investments,” it said in a separate statement. The unit appointed Charles Dupont to lead a new team working on infrastructure-lending investments.
The insurer signed an accord this month with Commerzbank AG to invest in corporate lending in Germany, Austria and Switzerland, mirroring partnerships it started in France last year with Societe Generale SA and Credit Agricole SA’s corporate and investment bank. CNP Assurances, France’s largest life insurer, said last week that it will invest as much as 2 billion euros in infrastructure loans over the next three years through a new partnership with Natixis SA.
Insurers are partly shifting investments toward higher-yielding corporate and infrastructure debt as Europe’s recession weighs on interest rates. The European Central Bank cut its benchmark rate in May to a record low of 0.5 percent.
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