UPDATEMAGAZINE I/2022 Marketing communication Outlook 2022 Finance For Future Private Debt Cold, colder, stagflation? New dimension of investment In the niches of the property drawing board Digital infrastructure Connecting to the future STEFAN HOFRICHTER | TOBIAS C. PROSS | CHRISTOPH HOLZER AND JÖRG SPANIER | ALEXANDER SCHMITT AND HEIKO WUNDERLICH | CLAUS FINTZEN

Take a chance on the future Update I/2022 Dear Readers, Times are tough. War, inflation, oil price shocks and the still smouldering coronavirus crisis – there is little cause for optimism at the moment. Too grave are the fates of the many people who are affected by war and its consequences. Too bleak are the prospects for the global economy and the impacts on our society. Stefan Hofrichter, Head of Global Economics & Strategy, speaks about the risk of stagflation in his latest outlook, rekindling memories that many know more from stories than from their own lives. His analysis shows that a repeat of the 1970s crisis is not likely, but weaker growth and high inflation will weigh on financial markets. Therefore, it is important to keep a close eye on the risks, but also to take a less defensive approach once again, as soon as the growth prospects become brighter. Think ahead and shape the future – that’s the message in a nutshell from our CEO Tobias C. Pross in his interview on #FinanceForFuture. It’s about the big topics, such as retirement planning, digitalisation and sustainability, as well as the associated trends and opportunities. It’s also about understanding that asset managers carry a responsibility for actively shaping these processes of change, while generating sustainable returns for their investors. Using ‘digital infrastructure’ as an example, Christoph Holzer and Jörg Spanier show how topics of the future are becoming attractive investment ideas. They present strategies that provide investors with access to this very popular and also highly complex asset class, enabling them to participate in growth in a sustainable way. In periods of accelerating inflation, assets that retain their value are always in demand. Real estate is one example. But is it still worth getting into the market? The risks have risen significantly, at least in some segments. Jörg Spanier explains the possibilities that investors have to combine solidity with more flexibility. Private real estate debt is the solution: an interesting alternative to fixed income investments, offering a low correlation with traditional asset classes. Other topics in this issue include blended finance strategies. These bring public and private capital together in a risk-tiered structure in order to invest in projects that are focused on achieving the United Nations’ Sustainable Development Goals in emerging markets. In addition, Emmanuel Deblanc, Head of Private Markets, explains the most important developments in the private markets segment – an exciting area for all investors. This issue of our publication demonstrates how you can take a chance on the future with your portfolio, even in difficult times. Be inspired. Heiko Teßendorf Heiko Teßendorf, Head of Business Development for Corporates and Family Offices, Institutional DACH, Allianz Global Investors 3

Update I/2022 Credit? Popular asset class! Good value Allianz Resilient Opportunistic Credit (AROC) Fund holds first close Allianz Global Investors has announced the first close of the Allianz Resilient Opportunistic Credit (AROC) Fund. The AROC Fund secured EUR 435 million in total commitments at first close, and has a target size of EUR 750 million. The fund will continue fundraising in 2022. It invests in OECD countries with a focus on Europe and the United Kingdom, and has an integrated ESG strategy with robust ESG risk mitigation. European Private Credit II closes at almost EUR 500 million Allianz Global Investors has announced the final close for the European Private Credit II (EPC II) Fund. The corporate private debt strategy collected a total of EUR 494 million in funds from more than 20 institutional investors, insurance companies and occupational pension institutions in Germany, France, Austria and Italy. EPC II offers institutional investors the opportunity to invest, alongside Allianz, in senior debt securities of medium-sized companies in Europe, particularly in Germany and France. EPC II has already invested more than 50% of the fund volume, and undertaken almost 20 capital investments in these two countries. European Captive Review Awards – Investment Specialist of the Year Allianz Global Investors was honoured again at the European Captive Review Awards 2021, winning in the “Investment Specialist of the Year”1 category. This distinction acknowledges the ability of our company to develop customised investment strategies with an appreciation of the financial objectives of the insurer. The captive asset management offering of Allianz Global Investors is an integrated client-support service that places the client at the centre of our actions, while taking full advantage of the resources available to the Allianz Group. Award winner Allianz Global Investors wins European Pensions Innovation Award Allianz Global Investors won the European Pensions Innovation Award at the 14th Annual European Pensions Awards 2021 in London.2 The team was honoured for its innovation in creating individualised lifecycle solutions with digital implementation on the basis of risklab’s advanced lifecycle strategy. This concept is already used in several German company pension schemes. It is offered by various Allianz life insurance units in Europe within the framework of fund-linked retirement planning solutions. Two institutions, one objective EIB and Allianz Global Investors launch fund for climate action projects The European Investment Bank (EIB) and Allianz Global Investors have launched the Emerging Market Climate Action Fund (EMCAF) in a public-private partnership. The governments of Germany and Luxembourg, the Nordic Development Fund, Allianz, the Swedish insurer Folksam and the EIB are acting as anchor investors. EMCAF is a fund of funds that supports climate-focused investment funds and projects in emerging markets and developing countries. Its focus will be on climate mitigation, climate change adaptation, and access to electricity. With a target size of EUR 500 million, the EMCAF aspires to become a European flagship fund for impact investing initiatives, mobilising substantial amounts of private capital to get climate action projects off the ground in Africa, Asia, Latin America and the Middle East. Big amount for big project Allianz invests EUR 1 billion in rollout of fibre-optic network in Austria Allianz Capital Partners, on behalf of Allianz Insurance Companies and the Allianz European Infrastructure Fund (collectively “Allianz”), has entered into an agreement with Oesterreichische Glasfaser-Infrastrukturgesellschaft (“oeGIG”) for the financing of the rollout of fibre-to-the- home in Austria. Allianz will provide around EUR 1 billion in equity capital for the expansion of the fibre-optic network in Austria in order to be able to connect up to 1 million households to the network through oeGIG by 2030. This will make oeGIG one of the largest fibre network providers in Austria. oeGIG is part of the Allianz Group, and has been operating as a telecommunications infrastructure company in Austria since 2019. The goal is to provide fast fibre-optic Internet connections to rural regions in particular. 5

Update I/2022 Cold, colder, stagflation? AUTHOR: STEFAN HOFRICHTER Investors are currently focusing on three issues: Russia’s military invasion of Ukraine, China’s zero Covid policy and – ever since autumn last year – inflation trends. Is the global economy at risk of cooling and entering a period of stagflation like the one in the 1970s, triggered by an oil-price shock in combination with new supply-chain upheavals due to the coronavirus? And how realistic is this risk? Since 24 February 2022 – the date when Russian troops invaded Ukraine – there has undoubtedly been great uncertainty among investors, and this is understandable. For more than three decades, the invasion of a European country (Ukraine) by another European country (Russia) was considered inconceivable. Besides the humanitarian disaster that the Russian invasion has caused in Ukraine – and possibly in many parts of the world if this year’s grain harvest in Ukraine, one of the world’s major exporters, fails substantially as a result of fighting, thereby leading to famine – we must also assume that the tectonic shift in the global security order could have long-term effects on the basic structure of the world economy, and of financial markets. While an ice age isn’t prevalent, a supercool environment is. 7

Cooling economy or recession? But what do the Russian army’s invasion and the sanctions imposed on Russia mean for growth and the markets over the coming months and quarters? It is very likely that global economic growth will slow significantly from the level it was at before the Russian invasion. The supply-chain upheavals that have already been mentioned are causing production losses. Sentiment indicators, particularly among consumers, have weakened considerably in recent times, and suggest more moderate spending behaviour. The massive increase in commodity prices – not just the doubling of oil prices or the tripling of gas prices, but also the significant increase in prices for industrial commodities and agricultural goods – is not only causing higher costs for companies, but also acts like an additional tax. In the past, a doubling of oil prices within a short period of two years was often a leading indicator of a recession. However, for two reasons, we don’t Update I/2022 see the latest oil price movement as a harbinger of recession (yet). Firstly, the energy efficiency of industrialised countries has more than doubled in recent decades, meaning that economic activity is much less dependent on oil than, for example, during the first oil price shock of the 1970s. Secondly, roughly the first half of the oil price increase of the past two years is explained by strong demand after the Covid shock in spring 2020, and not by an actual or expected supply shock (due to a shortage of Russian oil and gas supplies). However, despite the headwinds for growth, we don’t expect a hard landing for the global economy or the industrialised countries in the next 12 months, only a significant slowing of growth rates, which should still reach approximately the level of potential growth in most countries, or even exceed it. The inversion of the US yield curve – measured by the yield spread between 10-year and 2-year US Treasuries at the end of March – was historically an indication of recession within the following 12 months. On the other hand, other indicators – such as the still very positive yield spread between 10-year and 3-month government bonds – are sending much more constructive signals. (see Chart A/ and Chart B/) Companies must ask themselves the question: How safe are our foreign sales outlets and production facilities? 9

Update I/2022 volatility in financial markets (which already had to deal with the Asian crisis in 1997) to rise, with the result that leveraged investors, in particular, felt compelled to close out open positions immediately. The hedge fund LTCM – with a balance sheet total of about USD 125 billion and a nominal value of derivatives contracts of about USD 1.25 trillion, with equity capital of USD 4 billion – collapsed. The increase in market volatility was ultimately no longer manageable for the ‘Central Bank of Volatility’ (as LTCM was known among London traders). The collapse of this hedge fund led to shock waves in the financial system. The example from 24 years ago shows that the indirect impacts in a networked financial system can be a lot more significant than the immediate risks. It is indeed correct that the equity base in the financial system is much stronger today than it was before the financial crisis and at the end of the 1990s. However, the latest spread-widening in European swap markets and of the Treasury-EuroDollar (TED) spreads could also be interpreted to mean that the risks in the financial system have grown considerably. Statements made by the European Systemic Risk Board (ESRB) at the end of March also point in this direction. After investors believed the issue of Covid was already over and done with, it became the focus of attention again at the end of March. In reaction to renewed and increased outbreaks of the disease, China responded with heavy lockdown measures. As we know from the experiences of the past two years, Covid doesn’t just slow growth, but also leads to higher inflation due to upheavals in the production processes. This would therefore intensify the effects of the Ukraine crisis. 11

B/ US FED FUNDS TARGET RATE: FED ESTIMATE VERSUS E&S Update I/2022 5 4 3 1 1 0 –1 –2 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2021 Yield on 10-year US government bonds minus yield on 2-year US bonds Yield on 10-year US government bonds minus yield on 3-month Treasury bills Source: Allianz Global Investors, Federal Reserve, as of 29.04.2022 Challenging environment for financial markets What does all this mean for financial markets? How are various asset classes reacting to a flattening of the economic momentum, high inflation rates, rising interest rates and a reduction of central bank balance sheets? We expect to see continued pressure on bond markets, meaning higher interest rates and lower prices. However, the current environment is also challenging for equities and corporate bonds. While companies can pass on some of the rising production costs to consumers, they can only do so to a certain extent: inflation-adjusted corporate profits fall with inflation rates in excess of about 5%, as our analyses show. High valuations of US equities also offer little protection against possible earnings disappointments. (European and Asian equities are, by contrast, much more moderately valued.) Therefore, we believe that companies assigned to the ‘value’ investment approach should be included in every portfolio during times of rising interest rates and high uncertainty. To be sure, corporate bonds offer an additional yield compared with government bonds. But given the expectation of higher market volatility, fair valuations at best and worsening growth prospects, we consider a neutral allocation to be appropriate. The asset classes that could probably achieve above-average returns in the current environment include commodities (due to their inflation protection) and private markets (relatively stable income). Conclusion: Even though we don’t expect 1970s-style stagflation, our portfolio strategy has been somewhat more defensive for some time now, and it reflects our expectation of weakening economic momentum in combination with surprisingly high inflation and a normalisation of monetary policy. We are prepared to take on more risk again as soon as the medium-term growth outlook improves, valuations have become cheaper, or financial markets have priced in more monetary policy normalisation than they have so far. Stefan Hofrichter, Head of Global Econo- mics & Strategy, Allianz Global Investors 13

Update I/2022 You have amassed a wealth of experience in the investment fund industry, spanning more than twenty years. Looking back, what do you think is the single greatest insight you have gained? Tobias C. Pross: Well, if you look at how the allocation of investment companies' assets under management has developed over the last few years and decades, you will notice that almost tectonic shifts have taken place: while funds initially focused on equities, with fixed income as an optional extra added later on, the investible universe has now become considerably broader. Multi asset products have enjoyed a meteoric rise, and the next mega trend is already on the horizon: the quest for low beta products is being driven, in particular, by the negative and low interest rate environment. Demand for investments in private markets is growing, and we want to capitalise on this for the benefit of our investors. Gazing into the crystal ball, what do you believe will shape the future of the fund industry? Tobias C. Pross: I can identify three principal driving forces: 1, the demographic shift and retirement provision; 2, the creative disruption of society and the economy by the digital transformation; and 3, the need for sustainable investment solutions. It’s all about #FinanceForFuture. But demography, at least, is not a new trend,... Tobias C. Pross: Indeed, on the contrary, and we will be grappling with it for a long time to come. Demography is like a ticking clock. Given a combination of an ageing society and – thankfully – rising life expectancy, accompanied simultaneously by low real interest rates and enormous levels of public debt, it is obvious that fund-based solutions will be crucial when it comes to providing for old age. Fund-based solutions will be crucial when it comes to providing for old age. 15

So you could say that Active Management provides the solution to one of mankind’s most urgent problems? Tobias C. Pross: We have always provided solutions to problems; the difference now is that, with climate change and sustainability, this has taken on a whole new dimension, starting with selecting individual stocks. “Active“ is also about actively representing investors' interests. After all, fund investors are not able to exercise ownership rights themselves in companies that we hold for them in their fund units. The investment company that holds their units in custody as segregated assets exercises these rights for them by means of so-called “proxy voting“, i.e. voting on the investor's behalf. This task has become even more demanding as we apply the findings of ESG analyses, and strive to meet expectations of sustainable investment. At the same time, we have greater expectations of our own performance as well, not only in terms of voting at AGMs, but also of engaging directly with companies through discussions in order to achieve improvements, and of seeking to protect the interests of our investors through stewardship. In 2020 alone we attended almost 10,200 AGMs and, in 72% of cases, voted against at least one of the management's resolutions. Indeed, our efforts have made a significant impact. For example, following consultations with an oil company, the company in question made a commitment to reducing the net intensity of its greenhouse gas emissions, as well as to investing in carbon capture and storage (CCS) projects. The company announced new targets to reduce its GHG emission intensity from oil exploration by 2023. As a member of the Oil and Gas Climate Initiative (OGCI), the company is seeking to cut its methane emissions by 2–5% over the same period. So, Active Management does make a difference – even to the environment. Update I/2022 Tobias C. Pross is Chief Executive Officer at Allianz Global Investors. The questions were submitted by Dr Hans-Jörg Naumer, Director Capital Markets & Thematic Research. You can find more on this issue in a contribution with the same title by Tobias C. Pross published in the (German) book: Wealth creation policy: raising prosperity – reducing inequality – strengthening sovereignty. Tobias C. Pross, Chief Executive Officer, Allianz Global Investors 17

Update I/2022 19 Connecting to the future AUTHORS: CHRISTOPH HOLZER AND JÖRG SPANIER The ‘digital infrastructure’ asset class is relatively young – and increasingly popular with investors. No wonder, because it offers many promising investment opportunities. But in order to take advantage of them and find your way in this steadily growing market, specific knowledge is required.

Update I/2022 Focusing on growth potential Where are the best opportunities in this new asset class? One of our guiding principles at Allianz Capital Partners is the strict differentiation between infrastructure – including fibre- optic networks and cell towers – and digital technologies like 5G and other applications. A focus on infrastructure, which is always a prerequisite for technological advancement, creates lasting substance. It minimises the risk that an investment will become obsolete after a few years because the technology landscape has evolved further. According to this principle, three key areas were identified in which good growth opportunities can be expected in the coming years. 1 / Fibre optics: Considered a greenfield investment only a few years ago, there has been unprecedented growth in recent years, and there is still considerable pent-up demand. We assume that fibre optics will have similar market longevity to copper cables, which have played a key role in data transfer over the past 70 years. 2 / Cell towers: These will continue to attract stable demand – regardless of the technology that supports them – which opens up solid investment opportunities. 3 / Data centres: A very interesting area for which we expect further growth in the future. We are still in the initial phase of our engagement in this area, and are paying very close attention to the additional complexity that investments in data centres involves. In all three areas, the need for more infrastructure investments is currently rising, so good opportunities for steady, long-term returns are available. It should be noted that investments in these areas are heavily oversubscribed at the moment, which is why a very structured and disciplined selection of investments is an important key to success. The market potential and the above-mentioned robustness of the investment are among the key selection criteria. Furthermore, investors should give just as much consideration to the number of potential clients that they can reach with their investment as they do to the current and future competitive environment. Finally, it is important to compare the market entry costs with the potential income. As an experienced player in this segment, Allianz Capital Partners selects potential investment assets very carefully. When we invest in fibre optics, for example, we take special care to focus on underserved, often more rural areas. Here, we can offer a strong infrastructure position in the market as one of few providers – or even as the only one. In major cities, on the other hand, several infrastructure providers may be competing in a relatively small space. We invest in projects that already have a strong track record and market position, or have the potential to achieve an appropriate size in the market. 21

Update I/2022 Exclusive partnerships for even more investment opportunities In order to position itself successfully in the market for digital infrastructure, Allianz Capital Partners uses partnerships with highly competitive providers. Two examples show how additional potential can be exploited: 1 / Fibre optics 2 / Cell towers A very striking example is our joint venture with Telefónica to develop fibre optics in Germany, under the banner “Our green fibre optics.” The same is true of our investment – alongside the province of Lower Austria – in the company nöGIG. With this combination, we can support the development of fibre-optic networks in underserved rural areas all over Germany and Austria. As a result, wholesale access to fibre-to-the- home (FTTH) is being created, allowing Internet providers to offer fibre-optic Internet access to their end clients. In accordance with our principles, Allianz has invested in the infrastructure operator, and thereby laid the foundations for other telecommunications providers, which can connect to the fibre-optic network and offer their services this way. We have achieved similar success with investments in cell towers. We entered into a long-term strategic partnership with American Tower Corporation (ATC) and acquired a stake in ATC Europe. With around 212,000 locations in 25 countries, 4 ATC is one of the world’s largest operators of cell towers, which make something like the road network possible for digital traffic flows. On top of this, the company is independent of the mobile network operators (MNO). It can therefore offer its communication infrastructure to different clients, and thereby achieve higher rents and tenancy rates. ATC has 25 years’ experience with this business. In turn, ATC Europe also benefits from this with regard to its growth strategy, for example, and the freedom to exploit attractive opportunities in Europe through acquisitions. Christoph Holzer, Co-Head Infrastructure Direct Investments, Allianz Capital Partners Jörg Spanier, Co-Head Infrastructure Direct Investments, Allianz Capital Partners 23

Update I/2022 From pandemic to inflation In times of low interest rates, more and more investors have placed their investment focus on private markets, more specifically on property finance. During past crises the real estate market overall proved itself to be resilient, and therefore reinforced its appeal for investors who strive for stable returns and have a long-term investment horizon. In a Preqin study from November 2021, 90% of survey respondents said they intended to maintain or expand their real estate allocations. However, the pandemic has left its mark on some sectors, especially retail and hotels. Volatility is not the exception – it’s the rule. Whether it is the pandemic of the past two years or now also the invasion of Ukraine, events like these have increased uncertainty among investors even more. In a time of high inflation rates and considerable concern about future inflation trends, real estate as an asset class can offer a long-term hedge against these negative impacts. Portfolios that are diversified across various segments and regions, and are continuously refined, should be best placed here to defy inflationary pressures while generating attractive returns. The focus on property finance could therefore be particularly appealing to all those investors who look to the future with mixed expectations, after a positive market phase that lasted over a decade. With an appropriately diversified portfolio, investors can counter these negative effects. Office properties with flexible layouts did well even during the pandemic. Logistics properties also play an important role in portfolio construction, and should continue to be in demand in the medium to long term. In addition, residential investments in popular regions, student housing, or specialised real estate, such as research centres or technology parks, can also make a relevant contribution to the global diversification of institutional investors’ portfolios. 25

Update I/2022 ESG as innovation driver for value preservation The ‘ESG’ concept has been a topic for a long time now, particularly in the real estate sector. Many innovations have already been – and are being – implemented in this area. Investors are paying close attention to modern and efficient energy solutions for their properties, modern floor layouts, sustainable building materials and e-mobility to meet the needs of the changed working and living environments. While this green transformation requires considerable investment in the portfolio, it also boosts the portfolio’s attractiveness and value preservation significantly, making the ESG concept especially suitable for many investors’ long- term and sustainable investment strategies. The social aspect is also important to many investors in this asset class. Social concerns can increase the political risk of real estate investments, which can vary considerably from region to region. Societal transformation also includes digitalisation, which is commanding the attention of the real estate sector, and notably expressed itself in the increased need for fibre-optic Internet connections during the pandemic, but also in the stronger connectivity of rural areas, which became more attractive. Anything but immobile – real estate private debt Durability also means sustainability. For institutional investors, this means being able to anticipate trends and innovations in order to act in times of crisis, and to react flexibly to market changes. Property finance can offer an exciting addition in the field of private debt for diversification in the alternative investments sector. A long-term investment horizon taking into consideration ESG aspects combined with a diversified, high- quality portfolio could make all the difference in the long run. Alexander Schmitt, Senior Portfolio Manager, Allianz Global Investors Heiko Wunderlich, Head of Institutional Business Development DACH, Allianz Global Investors 27

A/ BLENDED FINANCE APPROACH: DE-RISKING VIA BLENDING SENIOR INVESTORS Private capital as anchor investor alongside other institutional investors First Loss protection JUNIOR INVESTORS Public capital Update I/2022 Local impact by co-investing with Development Finance Institutions in projects Source: Allianz Global Investor, 2021. For illustrative purposes only. A performance of the strategy is not guaranteed and losses remain possible. Emerging asset class with a potential to scale USD 4.2 trillion of additional annual investment is needed to achieve the SDGs by 2030. In Emerging Markets, demand for funding is particularly high due to a shortage in funding supply. Development capital is insufficient to address the development needs in Emerging Markets, and public capital markets, such as EM bond indices, do not invest in the countries with the greatest funding needs. DFIs and donors are focused on partnering for solutions to mobilise more private capital into Emerging Markets for the Sustainable Development Goals. Blended finance strategies are one of these solutions that helps to create untapped investment opportunities for institutional investors. Attractive returns with downside protection Financing of SDGs in emerging countries does not mean compromising returns – blended finance strategies can offer investors de-risked investment opportunities with investment-grade characteristics. The first loss or credit enhancement structures often incorporated in blended finance strategies allow investments made by senior investors to reach an investment-grade profile. This, in turn, results in lower capital charges, and allows large-scale investments. Applied within a diversified portfolio of EM loans, the first loss coverage from public sources also reduces the idiosyncratic project risk. Blended finance can also provide an attractive yield pick-up compared to equivalent government bonds, reflecting the relative illiquidity. AllianzGI’s blended finance strategies target a net return of USD 4.5% 8 for senior investors that is uncorrelated to publicly-listed securities, with a tenor of the investment of ~15 years. The senior return volatility is limited via a combination of low return volatility of the underlying project and capital loss absorption by the junior investors. Benefitting from the DFIs’ expertise Partnerships with DFIs are key to creating development finance solutions, as they leverage these institutions’ track record, expertise and knowledge of Emerging Markets. As the key investors in these markets, DFIs are highly experienced and have good relationships with central banks, governments and regulators, and are therefore beneficial in sourcing investment opportunities. These partnerships provide investments with a “halo effect” that can effectively reduce the risk of investments, and improve recovery rates in the case of loan defaults. DFI partners also keep a portion of the loans on their balance sheet to ensure alignment of interest. In addition, DFIs continue to monitor and manage the underlying loans, for example in case of amendments or waivers. 29

Update I/2022 In 2017, Allianz Group and the International Finance Corporation (IFC), a member of the World Bank Group, launched a partnership under the Managed Co-Lending Portfolio Program (MCPP). Allianz insurance companies committed USD 500 million in a vehicle, managed by Allianz Global Investors, to co-invest alongside the IFC in infrastructure projects in Emerging Markets worldwide. The vehicle has preferred access to invest in all IFC loans which fulfil a strict set of eligibility criteria. The vehicle is risk-tiered and, as such, Allianz investors have a preferred return, and IFC takes the first loss on investments up to their committed capital. Furthermore, the Swedish Development Agency (SIDA) provides a guarantee to IFC for part of the first-loss funding. B/ CASE STUDY: INTERNATIONAL FINANCE CORPORATION USD 500m Senior capital Junior capital Co-investing in infrastructure Loans Investment opportunity: Allianz Climate Solutions Emerging Markets Debt strategy The Allianz Climate Solutions Emerging Markets Debt strategy (ACSEM) is a blended finance strategy focusing on investments that are aligned with the Paris Agreement goals of creating a more sustainable future by addressing climate change. ACSEM focuses on investments that contribute to climate mitigation and resiliency across sectors in Emerging Markets. The strategy is set up as a risk-tiered vehicle with a senior capital tier and a junior capital tier. The junior investors absorb the first losses in the portfolio, offering investors of the senior tier capital loss protection. It targets an all-in net return of 4.5% 8 for senior investors. Investors will co-invest with Allianz, who are looking to commit about USD 350 million as a senior investor. A regional DFI is looking to become the anchor investor in the junior tier. ACSEM has a strong ESG & Impact focus and will target compliance with Article 9 of the Sustainable Finance Disclosure Regulation (SFDR) . Every fund investment will also be subject to the IFC Principles and the AllianzGI Private Markets ESG Policy. Key terms and characteristics (illustrative) Instruments Mainly senior debt, also subordinated debt or mezzanine capital | loan or note format Sector diversification Paris-aligned sectors, no single sub sector (e.g. solar energy) > 30% of overall portfolio Single name diversification Investment period Strategy term Approx. 40-50 deals depending on total fund / allocation size, no single name > 5% of overall portfolio 5+1 years (deployment will take place over 5 years with the possibility to extend for an additional year) 15-year term for senior investors 25-year term for junior investors to accommodate longer investments in infrastructure/energy, tail is born by junior capital Currency USD Target net return 4.5% (USD) 8 Minimum commitment USD [20] million The above are target preliminary characteristics of the Allianz Climate Solutions Emerging Markets Debt strategy and are provided for illustrative purposes only. The Investment Manager’s process may be changed from time to time at the Investment Manager’s discretion. There is no guarantee these characteristics will be attained. 31

Update I/2022 What do inflation and geopolitical developments mean for investors in today’s environment? Claus Fintzen: The developments in Ukraine are depressing, and the macroeconomic impacts of this war are hard to predict right now. What is clear, though, is that we will have to reckon with higher energy and raw material costs in the future as well. The resulting inflationary pressure should then lead to higher interest rates. When financing a company or project, investors must take into account how conditions may look in the future when repayments are due. We still find ourselves in a low interest rate environment. Issuers are taking advantage of this and have increased their debt levels, while their interest payments have remained steady. Higher interest rates could represent a hurdle for many companies – also in the infrastructure sector – that have to refinance their loans in an environment of considerably higher interest rates. Will they be able to service their debts while maintaining their investment grade status? At the same time, we are still in a low interest rate environment despite rising interest rates. Under these conditions, infrastructure financing could still offer significant advantages to investors with a ‘buy-and-hold’ approach. Infrastructure projects are inherently long-term, illiquid and often sustainable assets, and their illiquidity premiums can generate higher returns than, for example, many government bonds or mortgage bonds. Covid-19 appears to be over now, at least in the media. Does that also take pressure out of infrastructure projects? Claus Fintzen: The pandemic’s effects on the world population are still noticeable, and will perhaps never be fully quantifiable. But one of the factors that we can measure is how heavily it impacted transport infrastructure. After all, passenger services largely ground to a halt when the pandemic broke out. This had consequences: many airports, toll roads and other ‘essential facilities’ didn’t have enough current cashflow to keep fulfilling the conditions on their loans. In some cases, the shareholders were asked to step in, while other companies had to negotiate with their banks to extend liquidity lines, or to use existing credit lines in order to get through this period. The liquidity position of these assets is therefore a key factor. Could you elaborate and provide some examples? Claus Fintzen: Of course. Airport passenger numbers, for example, will probably recover to pre-pandemic levels, but this could take a while. Investors should be able to find out how the airports plan to cover their capital needs in the meantime. When it comes to road transport, traffic volumes declined by 90 percent during the lockdowns. After the restrictions were lifted, however, traffic quickly normalised and returned to pre-pandemic levels. And with regard to the public transport network, this sector certainly suffered, but showed itself to be very resilient thanks to the support and financial assistance of the municipalities. These important services will continue to exist in whatever form when people return to normal life after the pandemic. This means that many infrastructure facilities are now recovering gradually after Covid-19, but some will need more time, particularly airports with a high share of intercontinental traffic. We expect the impacts on airports to last three more years before they possibly return to 2019 levels again. 33

Update I/2022 What role does regulation play? Claus Fintzen: The infrastructure debt asset class is impacted by increasing regulation overall, and by the wish of regulatory authorities to offer investors more transparency and information. For example, the European Commission is intensively promoting the topics of sustainability and climate change. One result is the EU taxonomy, a classification system that aims to provide a common language and a clear definition of ‘sustainable’ business activities. The aim of this approach is to guide investments in such a way that the European Union’s climate and energy goals for 2030 are achieved. In the meantime, the Sustainable Finance Disclosure Regulation (SFDR) requires funds to disclose how they are increasingly incorporating sustainable practices in their activities. It also clearly defines which strategies are classified as sustainable investments. Is that actually an investment reason for investors? Claus Fintzen: In fact, a Preqin survey of private markets investors in June 2021 found that the most important reason why fund managers introduce ESG is investor demand. This shows that infrastructure debt investors, too, can play a decisive role in overcoming the climate crisis and achieving climate neutrality. However, in the case of companies that are not publicly listed, the challenge is often access to enough ESG information; while there is usually an abundance of data that provides, for example, an insight into the emissions profile of investments when it comes to listed companies. When it comes to non-listed (private markets) companies, this type of information is currently not available to the same extent. Furthermore, many industries still haven’t defined any common methods, reporting guidelines or key indicators, which makes it difficult to assess the progress achieved. Therefore, investors still have to expend a lot of time and resources to gather information from borrowers on areas such as greenhouse gas emissions or compliance with the EU taxonomy. For larger investors this task is easier to handle, as they can refer to a bigger and more relevant database, as well as internal empirical data and expertise. 35

Update I/2022 What’s the bottom line of all of this? Claus Fintzen: Investments in infrastructure are urgently needed around the world. Even if the political situation and the market – through rising interest rates, for example – remain challenging, we are still in a low interest rate environment in which infrastructure financing could be an interesting long-term sustainable investment. The banks, which are traditionally among the largest investors, prefer shorter-term financing, and have reduced the volume of long-term financing due to regulatory hurdles. This opens the door for institutional investors, particularly for those whose assets are matched by long-term liabilities. The demand and volumes for infrastructure financing are high – as are the growth opportunities. Crises, rising interest rates, regulatory changes, sustainability and increasing digitalisation are the five most important issues that investors should consider in the process. The article appeared in a slightly modified form in Private Banking Magazin. Claus Fintzen, CIO Infratsructure Debt, Allianz Global Investors The infrastructure debt asset class is impacted by increasing regulation overall, and by the wish of regulatory authorities to offer investors more transparency and information. 37

Masthead Update I/2022 Client Magazine for Institutional Investors Publisher: Allianz Global Investors GmbH Bockenheimer Landstr. 42–44 60323 Frankfurt / M. Editor in Chief: Kerstin Keller Project Manager: Lina Masri Editorial Team: Peter Berg, Arne Gottschalck, Pia Gröger, Kerstin Keller, Hans-Joachim Kollmannsperger, Dr. Hans-Jörg Naumer, Klaus Papenbrock, Luis Miguel Ribeiro Domingos, Henning Schneider, Oliver Schütz Contact the Editorial Team: update-redaktion@allianzgi.com Design: Rotwild GmbH, Köln Layout: Werbemanufaktur Albert, Frankfurt/M Photographs: Allianz Global Investors, Getty Images, iStock As of June 2022 Update I/2022 Investing involves risk. The value of an investment and the income from it may fall as well as rise and investors might not get back the full amount invested. Investing in fixed income instruments may expose investors to various risks, including but not limited to creditworthiness, interest rate, liquidity and restricted flexibility risks. Changes to the economic environment and market conditions may affect these risks, resulting in an adverse effect to the value of the investment. During periods of rising nominal interest rates, the values of fixed income instruments (including short positions with respect to fixed income instruments) are generally expected to decline. Conversely, during periods of declining interest rates, the values of these instruments are generally expected to rise Liquidity risk may possibly delay or prevent account withdrawals or redemptions. Liquidity risk may possibly delay or prevent account withdrawals or redemptions. The statements contained herein may include statements of future expectations and other forward-looking statements that are based on management's current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. We assume no obligation to update any forward-looking statement. Past performance does not predict future returns. If the currency in which the past performance is displayed differs from the currency of the country in which the investor resides, then the investor should be aware that due to the exchange rate fluctuations the performance shown may be higher or lower if converted into the investor’s local currency. The views and opinions expressed herein, which are subject to change without notice, are those of the issuer companies at the time of publication. The data used is derived from various sources, and assumed to be correct and reliable at the time of publication The conditions of any underlying offer or contract that may have been, or will be, made or concluded, shall prevail. The duplication, publication, or transmission of the contents, irrespective of the form, is not permitted; except for the case of explicit permission by Allianz Global Investors GmbH. For investors in Europe (excluding Switzerland) This is a marketing communication issued by Allianz Global Investors GmbH, www.allianzgi.com, an investment company with limited liability, incorporated in Germany, with its registered office at Bockenheimer Landstrasse 42–44, 60323 Frankfurt/M, registered with the local court Frankfurt/M under HRB 9340, authorised by Bundesanstalt für Finanzdienstleistungsaufsicht (www.bafin.de). Allianz Global Investors GmbH has established branches in the United Kingdom, France, Italy, Spain, Luxembourg, Sweden, Belgium and the Netherlands. Contact details and information on the local regulation are available here (www.allianzgi.com/Info). The Summary of Investor Rights is available in English, French, German, Italian and Spanish at https://regulatory.allianzgi.com/en/ investors-rights. For investors in Switzerland This is a marketing communication issued by Allianz Global Investors (Schweiz) AG, a 100% subsidiary of Allianz Global Investors GmbH. The Summary of Investor Rights is available in English, French, German, Italian and Spanish at https://regulatory.allianzgi.com/en/investors-rights. AD ID 2209644 39