Allianz Global Investors formed a strategic partnership with Virtus Investment Partners for the distribution of its retail business, allowing the Europe-based money manager to concentrate on institutional assets.
Virtus will become the adviser, distributor and administrator for about $23 billion in AllianzGI U.S. retail assets. It also will have exclusive distribution rights to AllianzGI's retail products in the U.S., a spokeswoman said.
AllianzGI will maintain all the investment management and will continue to manage the open-end, closed-end and retail separate account assets as subadviser, a news release said Tuesday. The move allows the $590 billion Allianz GI to concentrate on institutional and other business.
Allianz GI's Dallas-based value equity team, made up of about 12 investment professionals and managing about $7 billion of the assets, will also join multiboutique manager Virtus as an affiliate. The team, previously known as NFJ Investment Group, was acquired by AllianzGI's parent company in 2000 as part of its deal to purchase Pacific Investment Management Co.
The partnership expands Allianz GI's access and presence in the U.S. retail markets and increases Virtus' mutual fund AUM by about 40% to $54 billion. Virtus' total assets will grow to $128 billion, the release said.
"It will allow us to focus our U.S. distribution efforts on the institutional, insurance, subadvisory and non-resident markets, which are more closely aligned with our strengths in other markets," Tobias C. Pross, CEO of AllianzGI, said in the release.
The partnership will lead to a reduction in the number of roles required across distribution and AllianzGI's business-enabling functions in the U.S., the spokeswoman added.
However, it will also make way for newly created roles to support Virtus as the firm's distribution partner. The partnership will reduce costs and complexity, but retain most of AllianzGI's assets under management "and a good proportion of revenues," she added. Working with domestic firm Virtus means AllianzGI can also participate in the future growth of U.S. retail business, she said.
Specific terms of the agreement were not disclosed, beyond noting that there will be no payments at closing. "The partnership was structured with an alignment of economic interests over time," the release said. The transition is expected to complete by the end of the year, following fund-related approvals from the AllianzGI U.S. funds board and shareholders and retail advisory clients.