Allianz Voices Strong Support For Pimco

Fending off shareholder criticism, Allianz SE (ALV.XE) Chief Executive Michael Diekmann Wednesday expressed strong support for the company's asset manager Pacific Investment Management Company LLC.

"There is no reason [for shareholders] to rake us over the coals," Mr. Diekmann told the annual shareholders meeting, lauding Pimco's long-lasting track record of substantially outperforming peers in most of the past 26 years. The company's flagship asset manager is currently suffering from continuing net outflows and a weak investment performance.

"Allianz will do anything sensible to strengthen Pimco further," Mr. Diekmann said. "Clients gave us a very positive feedback regarding Pimco's new management structure."

Shareholders at the AGM grilled Allianz management about Pimco's current weak performance and the recent top management shake-up that involved the departure of CEO Mohamed El-Erian and the appointment of six deputy chief investment officers. Pimco founder and Chief Investment Officer Bill Gross remains at the helm.

"Mr Diekmann, what do you want to do to get Pimco out of the negative media headlines," asked Ingo Speich, fund manager at Union Investment, one of the top investors in Allianz shares. He asked whether the parent wants to get more strongly involved in Newport Beach, Calif., where Pimco is headquartered.

"We will see whether the new management structure with six deputy investment officers under Bill Gross will be sustained and generate better investment returns," Mr. Speich said.

He added that Allianz's share price, which has underperformed both the Stoxx 600 insurance index and the German Dax by 5% since the beginning of 2014, currently reflects "a substantial Pimco discount."

"We didn't need a male cat fight," as regards Mr El-Erian's departure, said Daniela Bergdolt, who represents DSW Deutsche Schutzvereinigung fuer Wertpapierbesitz, one of two biggest German retail shareholder groups.

As contracts for six out of 11 management board members expire at the end of the year, including that of CEO Diekmann, shareholders urged the company to provide clarity over possible contract extensions sooner than in October. Mr. Speich, Ms. Bergdolt and other shareholders expressed their wish for Mr. Diekmann to consider an extension of his contract by one or two years.

Write to Ulrike Dauer at [e-mail]

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