Amid the intensification of Israel’s multi-front military campaign across Gaza, Lebanon, and the occupied West Bank, a transatlantic financial giant has quietly become the single biggest foreign backer of Israeli sovereign debt, holding more Israeli government bonds than the United States, United Kingdom, France, and every other non-Israeli entity combined. New data compiled by Amsterdam-based sustainability research group Profundo, shared exclusively with Middle East Eye, lays bare the unprecedented scale of this investment: by September 2025, Germany’s Allianz, which owns California-headquartered bond behemoth PIMCO, the world’s largest active fixed-income manager, had accumulated an estimated $2.67 billion in Israeli government bonds across its network of fund subsidiaries.
This staggering sum accounted for 51.8 percent of all tracked non-Israeli holdings in Profundo’s dataset at that time, confirming that at the peak of Israel’s military expansion, the Allianz-PIMCO combine held more Israeli sovereign bonds issued to fund wartime operations than the rest of the entire world’s non-Israeli investors put together. For Israel, these bond sales have become a critical lifeline. To finance its ongoing military campaigns, Israeli authorities ramped up sovereign bond issuance to record-breaking levels in both 2024 and 2025, with a sizeable “war premium” built into yields to attract risk-tolerant institutional investors. Issued during the active conflict, these bonds carry an average interest rate of 5.56 percent, far outpacing the 1.4 percent average yield of pre-war Israeli issuances – a premium that has proven irresistible to yield-hungry asset managers even after all three major global credit rating agencies downgraded Israel’s sovereign credit score.
But the investment carries far more than standard financial risk. Since the International Court of Justice opened an investigation into allegations of genocide against Israeli forces in Gaza, holding Israeli government bonds exposes investors to significant legal and reputational repercussions that go well beyond ordinary sovereign debt investments. Critics argue that PIMCO’s sustained accumulation of these bonds demonstrates a deliberate disregard for fundamental human rights obligations under international law. “In light of Israel’s ongoing genocide in Gaza, PIMCO’s continued investments in Israeli sovereign debt demonstrate a clear disregard for human rights responsibilities and international legal obligations,” explained Max Hammer, a campaigner with BankTrack, an organization that tracks the human rights impacts of commercial financial institutions. “They also put PIMCO at odds with many of its peers, which have understandably decided to pull back from Israel’s bond issuances. Human rights organisations, international legal experts and UN officials – including Francesca Albanese – have been clear that providing financing to Israel inevitably means contributing to gross human rights abuses and war crimes.”
Profundo’s dataset tracks holdings from international institutional investors across four quarterly snapshots between late 2024 and early 2026. While the research is not fully comprehensive, it captures a clear, staggering trend: total non-Israeli holdings of Israeli government bonds surged more than fourfold from $1.16 billion in November 2024 to at least $4.91 billion by March 2026, a growth trajectory that aligns directly with the expansion of Israel’s military operations across Gaza, Lebanon, and the occupied West Bank. The data reveals that this explosive growth is overwhelmingly driven by just two markets: the U.S. and Germany. Together, investors based in these two countries held 90.7 percent of all tracked non-Israeli holdings as of early 2026, totaling $4.45 billion of the $4.91 billion aggregate, with all other nations combined accounting for less than 10 percent of total foreign holdings.
The rise of Allianz-PIMCO’s holdings is particularly dramatic. In November 2024, shortly after the outbreak of the current conflict, the Allianz group – which spans its core German insurance operations, PIMCO’s U.S. fund platform, PIMCO Europe, and Allianz Global Investors – held just $32 million in Israeli bonds. Less than 12 months later, that figure had ballooned to $2.67 billion, a concentration of investment unmatched by any other corporate group in Profundo’s dataset. “Allianz, through PIMCO, is by far the largest non-Israeli investor in Israeli sovereign bonds and has been so since the October 7 attacks. It has not divested from these bonds, even after allegations of genocide were submitted to the ICJ,” said Ward Warmerdam, senior researcher at Profundo. “It’s no coincidence that it’s a US-German company that is investing so much into Israel. Allianz/Pimco is the largest fixed income investor in the world. But, that only goes some way to explain this scale of investment. I believe it is disproportionate, and deliberate. And the question of how deliberate it is for them to double down on Israeli sovereign bond issuances after October 7th is something I believe only insiders can speak to.”
Middle East Eye reached out to both Allianz and PIMCO with detailed questions about their Israeli bond holdings, but neither company had issued a response by the time of this publication. PIMCO, officially the Pacific Investment Management Company, is one of the most influential players in global bond markets. Founded in Newport Beach, California in 1971, the firm manages $2.27 trillion in total assets as of early 2026, including $1.86 trillion held on behalf of external clients ranging from public pension funds to sovereign wealth funds and global insurance groups. PIMCO has been a wholly owned subsidiary of Allianz since 2000, and together with Allianz Global Investors, it helps the parent group manage nearly €2 trillion in third-party assets, making the combined Allianz group one of the largest asset managers on the planet.
The group’s Israeli bond holdings are spread across dozens of separately registered fund vehicles, with the majority held through PIMCO’s various subsidiaries, plus additional holdings through Allianz Global Investors. Profundo’s aggregation of separate regulatory filings reveals the $2.67 billion peak holding figure, but researchers emphasize this is almost certainly an undercount of the group’s true exposure. Beyond investing its own and client capital through its in-house funds, PIMCO also acts as a sub-manager for hundreds of external mandates from institutional investors around the world, purchasing bonds on behalf of third-party clients within client-approved investment guidelines. This means PIMCO’s role in the Israeli bond market extends far beyond its own balance sheet holdings, with the true volume of Israeli bonds passing through PIMCO’s operations unknown to the public.
One high-profile example of this dynamic came to light in a previous Middle East Eye investigation, which revealed PIMCO purchased $29.2 million in Israeli government bonds between 2024 and 2025 on behalf of Border to Coast, the United Kingdom’s largest public sector pension pool. The purchases only became public after pro-Palestine activists filed public inquiries, prompting Border to Coast to open a review and ultimately divest its holdings under activist pressure. The only rationale PIMCO provided for the purchases, relayed to Border to Coast ahead of the divestment, was that the bonds were purchased based on Israel’s then-strong credit rating and economic fundamentals. However, this explanation does not rule out hidden political ties or vested interests driving the investment, and no PIMCO executive, including CEO Emmanuel Roman, has ever addressed the purchases publicly. Notably, PIMCO’s global advisory board includes Joshua Bolten, former White House Chief of Staff and a prominent figure in Washington’s pro-Israel policy community, alongside former UK Prime Minister Gordon Brown.
While Allianz-PIMCO dominates foreign holdings of Israeli sovereign bonds, the broader U.S. investment industry stands as the core pillar of international demand for the debt. U.S.-based investors held $2.02 billion in Israeli government bonds as of March 2026, up from just $879 million in November 2024, with growth remaining steady and showing no signs of slowing. Pennsylvania-headquartered Vanguard, the world’s largest index fund manager, crossed the $1 billion threshold in Israeli bond holdings for the first time in the March 2026 snapshot, with its holdings continuing an upward trajectory.
Germany’s outsized share in the data is largely a product of PIMCO’s ownership structure: of the $2.43 billion in total German-domiciled holdings tracked in the dataset, roughly 94 percent is managed by PIMCO out of its U.S. headquarters. In reality, the overwhelming majority of this investment is U.S.-domiciled capital, flowing into Israeli war bonds at an unprecedented rate through U.S.-based asset management firms. After the U.S. and Germany, the next largest national holders as of March 2026 are the United Kingdom ($149 million), Canada ($101 million), Italy ($53 million), Switzerland ($46 million), and France ($22 million) – with all these nations combined accounting for just 9 percent of total non-Israeli holdings.
The concentration of U.S. capital in Israeli bonds reflects both the outsized dominance of U.S. asset managers in global fixed-income markets and the deep, sustained support for Israel at the highest levels of U.S. political and financial leadership. The trend also highlights a stark divide between the U.S. and much of Western Europe when it comes to Israeli bond investment. While the U.S. and Allianz-PIMCO have dramatically expanded their exposure, a growing wave of European institutional investors have moved to divest their Israeli holdings in response to human rights concerns. In September 2025, Danish academics’ pension fund AkademikerPension formally excluded Israeli sovereign debt from its portfolio. Three months prior, the Irish Strategic Investment Fund sold off all its Israeli government bonds, while Norway’s Government Pension Fund Global divested from 11 Israeli companies and excluded five major Israeli banks.
“Across the West’s asset management industry, we’re seeing divergence rather than convergence [especially between the US and much of Western Europe],” said Courtney Wicks of the Center for Monitored and Ethical Investment. “Some managers are reducing their exposure to [Palestine-related] human rights concerns in response to political or reputational pressure, rather than strengthening conflict-sensitive stewardship frameworks.”
This divergence is even visible within the Allianz group itself. In late 2025, Allianz’s core insurance division dropped its coverage contract for Elbit Systems UK, the British subsidiary of Israeli arms manufacturer Elbit Systems, following months of sustained activist pressure. At the very same time, the group’s asset management division held billions of dollars in Israeli government bonds that fund the military campaigns Elbit Systems supplies. Pro-Palestine activists who occupied Allianz offices in London and Guildford in 2024 and 2025, spraying red paint to protest the Elbit contract, now face a nearly £300,000 civil lawsuit from Allianz, in addition to existing criminal proceedings. A London court recently ruled the civil case can proceed, and the activists, who have no access to legal representation for the civil claim, argue the lawsuit is an attempt to suppress legitimate political protest. For context, Allianz reported an operating profit of $20.1 billion in 2025.
