PIMCO’s shrinking assets under management have pinched the operating profit of its parent company, global insurer Allianz SE.
In the first half of the year, PIMCO reported an €823 million ($930 million) operating profit, down 29% from the first six months of 2014 because of large net outflows.
PIMCO made up 14.5% of Allianz’s operating profit in the first six months of 2015, down from 21.1% in the year-earlier period.
Despite the PIMCO issues, Allianz SE Chief Financial Officer Dieter Wemmer said in a conference call with analysts on Aug. 7 that Allianz expects operating profit for 2015 to be within the upper end of a target range of €10.8 billion.
Morningstar analyst Vincent Lui said that would mean a flat operating profit this year when compared with 2014 results.
He said that strong results in Allianz’s property and casualty insurance division in the first half of the year, due to a reduction in claims, helped counter the negative headwinds from PIMCO net outflows.
Mr. Wemmer put a positive face on those net outflows, noting that the $32 billion in net redemptions in the second quarter of 2015 were less than half of those seen in the first quarter of 2015.
He said the asset manager is planning new investment strategies, but offered no details.
The CFO said about PIMCO, ”We are not satisfied to be a smaller company.”
“That is absolutely not our plan,” he said. “And PIMCO has to come back.”