Allianz's captive real estate unit is to be combined with Pacific Investment Management Co., creating a €100 billion ($112.9 billion) real estate business.
The shares of Allianz Real Estate, which has €76.3 billion in assets under management, will be transferred to $1.9 trillion manager PIMCO by parent Allianz SE, the group said Tuesday. Total assets under management of the combined core, value-added and opportunistic real estate unit will be €100 billion across Europe, the U.S. and Asia-Pacific.
Allianz Real Estate will become part of PIMCO and thereby part of Allianz's money management division, which also includes Allianz Global Investors. The business currently sits within Allianz SE's investment management division, which looks after different Allianz SE entities' investments, a spokeswoman for Allianz Real Estate said.
Allianz Real Estate CEO and CIO Francois Trausch will report to PIMCO CIO Dan Ivascyn. The spokeswoman said there will be no further personnel changes.
PIMCO and Allianz SE must first coordinate the transfer of Allianz Real Estate, the spokeswoman said. Alongside the transfer, a working group made up of key PIMCO and Allianz Real Estate personnel will decide on a timetable for bringing the businesses more closely together.
The incorporation of the real estate business into PIMCO is subject to the finalization of legally binding contracts, regulatory approvals and the involvement of employee representatives in Continental Europe, an Allianz news release said.
"Real estate has been, and will continue to be, central to the development of our private strategies platform, which we consider essential to providing our clients with alternative approaches to achieving their long-term investment objectives," said Emmanuel Roman, CEO at PIMCO, in the release. "By incorporating Allianz Real Estate into PIMCO's existing suite of private solutions, we intend to significantly enhance our capabilities in an area that has become a critical component of our clients' portfolios."
