Allianz hit by capital outflow from Pimco’s funds division

Germany’s Allianz reported a net outflow of €34 billion as its Pimco Funds division exited in the second quarter amid a plunge in bond markets.

The Munich-based company said on Friday that investors had raised €29 billion from the California-based company. credit manager pimco 3 months until the end of June.

Citi analysts said in a note that Pimco’s outflow was “significantly higher than expected.”

Investors are watching closely the fate of PIMCO, the world’s largest credit-focused manager, as the bond market booms for three decades. run out of steam.

AllianzFocused on insurance and wealth management, reported an operating profit of €3.5 billion, slightly above analyst expectations. Net profit was slightly below expectations due to lower investments in the Group. Allianz shares fell 2% in early trading on Friday.

Chief Executive Officer Oliver Bethe said the group’s earnings and balance sheet had “proven to be resilient against heightened volatility and a fundamentally weak economic environment.”

The Group’s property and casualty insurance division performed well, driven by lower natural catastrophe claims and higher commercial premiums. This offset the poor performance of the Asset Management division.

Pimco And peers are navigating an environment in which the highest level of inflation in a generation is eroding the value of their bond holdings. The plunge in bond markets also reflects concerns about the impact of Russia’s war in Ukraine on the global economy.

Pimco, a pioneer in active bond trading, also has to contend with the proliferation of cheap index-tracking funds run by the likes of BlackRock and Vanguard.

Pimco CEO Emmanuel Roman and Chief Investment Officer Daniel Ivascyn have shifted to alternative strategies to diversify their fund managers. These include direct rentals, aircraft leasing, real estate, and a catalog of pop songs.

Overall third-party assets under management by Allianz declined by €109 billion to €1.8 trillion during the fourth quarter as a result of market and currency movements and investor exits.

The company €6 billion settlement Earlier this year, the company reached an agreement with US authorities over a scandal in its US fund business. It involved securities fraud and cost investors billions of dollars worth of losses.

As a result of the settlement, net income attributable to shareholders in the first half of the year was halved to 2.3 billion euros.

Analysts at Jefferies described the results as “modest but modest” profit margins, but noted lower assets under management and lower earnings in Life and Healthcare.

Allianz hit by capital outflow from Pimco’s funds division

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