Germany’s Allianz reported a net outflow of 34 billion euros as its fund arm Pimco was hit by withdrawals in the second quarter amid a sell-off in the bond market.
The Munich-based company said on Friday that investors had withdrawn 29 billion euros from the California-based company. Credit Manager Pimco for three months to the end of June.
Analysts at Citi said in a note that Pimco’s cash outflow was “significantly higher than expected”.
Investors are keeping a close eye on the fortunes of Pimco, the world’s largest credit-focused manager, as the 30-year bond market booms breathless.
Allianz, which focuses on insurance and wealth management, reported an operating profit of 3.5 billion euros, beating analysts’ expectations. Net income fell slightly from forecasts due to a decline in the group’s investments. Allianz’s share price fell 2% in early Friday trading.
Managing director Oliver Bäte said the group’s profits and balance sheet had “proven resilience to strong volatility and a fundamentally weaker economic environment”.
The group’s property and casualty division posted good results thanks to lower bills from natural disaster claims and rising commercial insurance prices. This helped offset the weaker performance of the asset management division.
Pimco and its peers are trying to navigate an environment where the highest inflation in a generation is eroding the value of their bond holdings. The bond market sell-off also reflects concerns about the impact of Russia’s war in Ukraine on global economies.
As a pioneer in active bond trading, Pimco is also facing an expansion of low-cost index-tracking funds, run by BlackRock and Vanguard, prompting some investors to question the payout. fees they pay to active managers.
Pimco CEO Emmanuel Roman and chief investment officer Daniel Ivascyn have turned to alternative strategies to diversify fund managers. These include direct loans, aircraft rentals, real estate, and pop song catalogs.
Total third-party assets managed by Allianz fell by 109 billion euros in the quarter to 1.8 billion euros, due to currency and market volatility as well as investor withdrawals.
The company does not provide additional for Settlement of 6 billion euros it agreed with US authorities earlier this year over a scandal at its US fund business. The case involved a securities fraud that cost investors billions of dollars.
Net income attributable to shareholders for the first six months of the year was halved as a result of the settlement, to 2.3 billion euros.
Analysts at Jefferies described the results as a “modest, albeit low-quality” profit hit, but noted a decline in assets under management and low health and life income. than.