Allianz Expects Pimco to Return to "Historic" Flows in 2014

By Ulrike Dauer 

The parent company of Pacific Investment Management Co. LLC still expects Pimco and Bill Gross's flagship fund to return in the course of this year to the substantial net inflows of the past.

Investors pulled $4.5 billion from the Pimco Total Return Fund in June, marking the 14th consecutive month of outflows and the biggest monthly outflow since September 2013, according to fund tracker Morningstar. The exodus continued even though the fund's return outperformed many rivals during the second quarter.

Mr. Gross is co-founder and chief investment officer of Newport Beach, Calif.-based Pimco, which manages $1.94 trillion as part of Allianz.

Allianz SE expects developments at Pimco to "return to historical numbers " during 2014, Chief Financial Officer Dieter Wemmer told investors Friday at the group's capital markets day in London.

Mr. Wemmer said Pimco has always had some outflows in the past and that the Total Return Fund--the world's largest bond fund--makes up only 30% of the portfolio.

For decades Pimco was the jewel in the German company's crown. However, it was the main drag on Allianz's first-quarter earnings.

In May, Mr. Wemmer signaled Pimco will be scrutinized to ensure it reverses net outflows in the coming quarters; indeed, net outflows halved in the first quarter compared with the fourth.

Still, many investors remain cautious about the money manager after a management shuffle earlier this year that resulted in the departure of the firm's co-chief investment officer and chief executive, Mohamed El-Erian, amid tensions with Mr. Gross, lagging fund performance and record outflows in 2013.

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