Allianz Global Investors set course

Allianz Global Investors set course
Expanding market leadership in Germany
Strong institutional business stabilizes 2008 sales result / Market-related price falls and outflows from mutual funds
The 2008 financial year at Allianz Global Investors Germany was characterized by market-related price falls and outflows from mutual funds, alongside a sustained strong result from institutional investment business. Overall, however, the company posted a negative sales result of minus 1.9 billion euros. Assets under management fell to 259 billion euros at the end of 2008 as a result of lower prices (previous year: 290 billion euros). This development did not have a negative impact on the competitive position, however, as the market share of 18.5 percent was 0.3 percent higher year-over-year.
Managed funds of funds see inflow of capital
The high net outflow from money market funds (minus 5.0 billion euros) and bond funds (minus 6.0 billion euros) in particular, that could be observed throughout the sector, led to a negative net inflow of minus 9.9 billion euros in mutual funds. Investors pulled 0.5 billion euros out of equity funds. “Managed funds of funds, on the other hand, posted a more pleasing result with a plus of 3.1 billion euros. This type of product gives asset managers good scope to show their core expertise by actively distributing assets over different investment classes and individual securities”, explained Horst Eich, CEO of Allianz Global Investors Germany.
Institutional investors – one of two euros flows into AllianzGI
Business with institutional investors, on the other hand, has had a stabilizing effect. With a positive net inflow of 8 billion euros, including 5.1 billion euros into “Spezialfonds” and 2.9 billion euros into discretionary mandates, over one of every two euros invested in this sector in 2008 was put into the hands of Allianz Global Investors. “We have always had a strong position with institutional customers, since we offer more than mere capital investment or the administration of customer assets. Our dynamic risk diversification products were extremely successful in the crisis-ridden year of 2008,” said Thomas Wiesemann, CEO of Allianz Global Investors Germany.
As company pension funds are exposed to increasingly more risks, Wiesemann expects there to be a strong demand in future for concepts combining the management of capital assets and pension liabilities. He added that Allianz Global Investors was one of the few companies to offer holistic solutions in the rapidly growing field of fiduciary management.
Sharper profiling of the value added chain …
Allianz Global Investors made use of the past year to expand its leadership role through strategic initiatives. At the end of the year, for example, Allianz Global Investors transferred its German fund accounting and administration to the joint venture Dealis Fund Operations GmbH, which they set up together with Dekabank. With over 2100 funds and AuM of over 275 billion euros, the company is the largest provider of fund accounting in Germany.
… and expansion of market leadership through the integration of cominvest
The takeover of cominvest on January 12, 2009 allowed the company to strengthen its core business and to significantly increase its lead on the competition with joint assets under management of 303 billion euros and a market share of 21.7 percent at the end of the 2008 financial year. The company now offers a full range of products, has widened its sales base and is actively promoting the process of consolidation and concentration in the German asset management industry. The two CEOs, Mr. Eich and Mr. Wiesemann, expressed confidence that the process of integration would play a significant role in helping Allianz Global Investors to become leaner and more efficient by the year 2011.
They went on to describe concrete measures which were already planned for this year, such as shared premises for the employees of the Frankfurt and Luxembourg offices and the alignment of the IT systems. “We are currently investigating all the processes and structures and will combine the best features of both from the point of view of efficiency. By 2011 we intend to bring the activities together under the umbrella of a joint investment company with the Allianz Global Investors brand in Germany”, explained Eich. There will also be some savings in the area of personnel, although there is no definite workforce reduction target, he emphasized.
Inflows in the new Year
Since January, Allianz Global Investors Germany has also reported the figures for cominvest. According to preliminary calculations at the end of February, Allianz Global Investors Germany has received some 2.1 billion euros in new funds through all the available vehicles since the beginning of the year. Wiesemann explained that: “The wide institutional customer base affords our business a high degree of stability. On the other hand, there was a great deal of reticence among private clients due to the current market environment. The sharp drop in interest rates on bank deposits could make a lot of private investors return to simple and traditional fund investments, however.
Funded pension products remain a long-term driver
The trend towards funded pension products is a steady growth driver for Allianz Global Investors. This applies both to institutional and private investors. In view of demographic changes and the ensuing fall in the level of statutory pay-as-you-go pensions, there is a constant demand for long-term investment products in order to guarantee financial security in the future. This year, Allianz Global Investors has launched its first state-subsidized private Rürup pension fund, Allianz Fonds BasisRente, which is designed to build up assets through investment funds.

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