EUROPE - German financial group Allianz managed to grow its net inflows in the asset management business to €33bn in the first half of 2008.

The figure compares to net inflows of €20bn in the same period last year but it still could not save assets under management from falling to €740bn at end-June from €765bn at year-end 2007.

"Main source for the inflows was Allianz' robust bond business of Allianz Global Investors," the group noted in a statement.

A spokesperson for Allianz confirmed the majority (65%) of the asset management business was for institutional clients with a "slight shift more towards institutional business" having taken place this year.

Managed assets returned 2.7%, which brings the three-year average annual return to 9.3%. 

"Almost 80% of Allianz Global Investors' assets under management have exceeded their benchmark," noted Helmut Perlet, board member of Allianz SE.

"Our strong investment performance in the bond and equity business will be the basis for profitable growth in the following years."

That said, Allianz has had to revise its outlook downwards for 2009 from the goal it set in 2006 to increase operating profits by 10% annually.

"In this environment a reliable result prognosis is not possible, especially in the banking business," pointed out Michael Diekmann, chairman at Allianz SE.

"However, we are expecting the earning power underlying our insurance and asset management business to be strong enough to achieve a gross operating profit (operatives ergebnis) of at least €9bn for 2008 and 2009."

For the first six month of 2008 the gross operaing profit was €4bn.

Allianz noted the financial crisis has negatively influenced the business and fund-based life insurances was one cause of the negative trading result achieved by Allianz' subsidiary Dresdner Bank.

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