PIMCO Gains Independence From Corporate Parent Allianz

(September 7, 2011) — Europe’s biggest insurer, Allianz, has said Bill Gross’s Pacific Investment Management Co. (PIMCO) will have more freedom around distribution of its products.

In a move to restructure its asset management business, the German insurer has decided to create Allianz Asset Management, which will be comprised of two distinct units – PIMCO, the world’s largest bond manager, and Allianz Global Investors (AGI).

Allianz’s asset management business has $2 trillion in assets under management. Officials say the firm’s steep growth in assets is attributable to the steady growth of PIMCO since it was acquired 11 years ago. The reorganization by Allianz gives PIMCO greater independence from its corporate parent as it expands into equities.

Commenting on the changes, Joachim Faber, Member of the Board of Management of Allianz SE, responsible for the Asset Management business, said: “These latest refinements to the structure of Allianz’s asset management business reflect two things: first, the global scale and broadening scope of PIMCO’s investment management platform, and our support for the continuation of that success story; and secondly, the complementary nature and approaches of our AllianzGI businesses and our confidence in their ability to leverage further their collective expertise for the benefit of clients globally.”

As a result of the change, PIMCO will now become responsible for distribution of its products to client segments in Europe and Asia Pacific markets, as is already the case in the US and with institutional clients globally. “As a parent, Allianz has enabled PIMCO to thrive by serving well the firm’s clients over the last 11 years,” Mohamed El-Erian, CEO and Co-CIO of PIMCO, commented in a statement. “Our long-standing relationship with Allianz is extremely beneficial to our clients, Allianz’s shareholders and our employees around the world. Entrusting us with this additional operational autonomy reflects the strength of the relationship with Allianz and the mutual respect that exists. We expect this new structure to facilitate our continued evolution to become the provider of choice to clients around the world for their complete global investment solutions in a rapidly changing global landscape.”

Jay Ralph, head of Allianz in North America as well as chief operating officer of AGI, will lead Allianz Asset Management. Elizabeth Corley, the head of AGI in Europe, will become chief executive of AGI. Meanwhile, Joachim Faber, chief executive of AGI, is retiring.