Allianz Considers Offshore Wind Farm Investment to Boost Returns

Allianz SE may invest in offshore wind farms as Germany’s largest insurer seeks alternative ways to boost returns.

Allianz is “seriously” considering turbines at sea as long as the risk-return profile is acceptable, David Jones, chief executive officer of the Munich-based insurer’s Allianz Specialized Investments unit, said at a conference. Allianz has invested more than 1.3 billion euros ($1.6 billion) in renewables since 2005 with a focus on land-based wind and solar, he said.

Insurers and pension funds are searching for investment options after low interest rates hurt bond returns and equity markets suffered volatility. PensionDanmark A/S and Dutch retirement fund administrator PGGM NV bought shares in offshore wind projects expected to operate for about 25 years as European nations promote the emissions-saving technology.

“We’ve taken the view that in principle we’re ready to invest in offshore,” Jones said yesterday in London. “If we do it at all, we’ll only do it as a minority investor with a leading utility with a strong track record,” he said. Allianz has had such a “dialogue” with utilities, Jones said.

Offshore wind ventures are larger than onshore counterparts, requiring more capital. While the projects have less proven technology and operational experience, they may offer the chance for greater returns compared to onshore wind, according to Jones.

“We don’t have to deploy a certain amount of money in a particular time scale to hit clean-energy targets,” Jones said. “We’re purely an investor looking for a good risk-adjusted return for our pension holders.”

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