AllianzGI to launch UK building fund Allianz Global Investors is to launch a pioneering infrastructure debt fund in the UK - the first of its kind - to help build schools, hospitals and roads in a landmark initiative designed to create jobs and stimulate the faltering economy. The asset manager, one of the biggest in Europe with €302bn under management, says the fund is likely to blaze a trail for others with the potential to raise billions of pounds to improve the country's infrastructure. AllianzGI says it is the first fund from a mainstream asset manager to offer senior infrastructure debt, the safest form of fixed income assets, which is why some investors are hailing it is an important milestone for the markets. It has also won backing from the government, which is pinning hopes on private investors to help bring about recovery through this kind of fundraising. The fund will be launched in the second quarter and will raise £1bn initially, but has the potential to raise much more as investors are increasingly demanding these type of assets. Significantly, the initiative is a sign that asset managers are starting to fill the void left by banks, who have largely stopped funding infrastructure projects as they are forced to deleverage and shrink their balance sheets because of capital constraints. Deborah Zurkow, chief investment officer of infrastructure debt at AllianzGI, said: "The creation of the fund is a tangible sign of the progress that is being made in the infrastructure debt market. It will benefit both investors in search of attractive, sustainable returns and important infrastructure projects in need of funding. She argues infrastructure debt is ideal for many investors, such as pension funds and insurance companies that need assets to match liabilities, but also need an alternative to government bonds that are offering extremely low yields. Typically, an infrastructure debt instrument offers about 3 percentage points more than a US Treasury in terms of yield. AllianzGI also plans to launch a similar sized infrastructure debt fund in Europe in the summer, which will also be one of the first, for building projects and developments on the continent. AllianzGI became the first large asset manager to launch an infrastructure debt unit, hiring a team of experts, last July. BlackRock, the world's biggest manager of money, then announced the launch of an infrastructure debt unit in November. The moves by AllianzGI and BlackRock highlight the growing importance of this asset class as governments look to reignite sluggish economies by using private money to back public projects.