Allianz Global Investors is carving an independent path without its sister subsidiary Pacific Investment Management Co., launching a more integrated business model across asset classes and building its own fixed-income capabilities.
A new business structure separated PIMCO from AllianzGI at the start of the year, allowing for more independence for both.
The changes also increased pressure on AllianzGI to better distinguish its core competencies to become more profitable, sources outside of the firm said, as it no longer enjoys the operating profit generated by PIMCO.
For parent Allianz SE, establishing a more independent AllianzGI that competes with PIMCO could help strengthen the parent company over the long term, according to consultants, analysts and bankers.
“With PIMCO now focusing not only on bonds, but also multiasset and equities, the new (AllianzGI) is also able to offer more fixed-income products,” said Andreas Utermann, the firm's co-head and global chief investment officer based in London.
“We're two independently managed asset management companies,” competing in broadly the same marketplace, Mr. Utermann said. “One doesn't know what the other is going to do. It's Darwinian, in the sense that there's nothing in the (company) structure that will somehow regulate or prevent any competition.”
Key to the new structure are three regional heads — for Europe, Asia-Pacific and the U.S. — responsible for delivering AllianzGI's global product line in a locally relevant way, said Elizabeth Corley, co-head and CEO at AllianzGI based in London. James Dilworth, CEO for Europe; Douglas Eu, CEO for Asia-Pacific; and Brian Gaffney, CEO for the U.S., are also helping to unlock the potential for certain strategies that had only been available in domestic markets.
U.S. high-yield and corporate bond strategies managed by an AllianzGI team based in San Diego is attracting more investors from Asia. “Previously they weren't sold outside the U.S., so nobody (else) knew about them,” Ms. Corley said.
“One of the things we did was to look across the whole world to see what products we have and to match those products with the market opportunity, no matter where they are based.”