Allianz: still no asset management profits
GERMANY – Allianz Group’s asset management business is still unprofitable, despite increasing its assets by 3.1% over the first half of this year to 1.02 trillion euros.
Group investment increased by 17 billion euros to 420 billion euros over the first half, while third-party investments increased by 10 billion euros to 571 billion euros. A four billion-euro increase was also seen in investments for unit-linked life insurance.
The main contributing factors to the increase in assets were net inflows of 18 billion euros, and portfolio gains of 32 billion euros due to rising equity and bond prices. This compensated for the conversion looses from the weaker dollar of 40 billion euros.
First-half losses for the asset management business of Allianz Group amounted to 130 million euros – less than expected. The operating result amounted to 320 million euros, following 334 million euros in the corresponding prior-year period. This is expected to improve, going forwards.
When asked why ADAM is not yet profitable, Helmut Perlet, board member said: ”Exceptional factors were the amortization of goodwill for PIMCO and Nicholas-Applegate in conjunction with our acquisitions. But eventually these will also come to an end. All in all we are already above plan.
“Net sales have developed well, capital markets have recovered slightly and at the same time we have been able to reduce our cost-income ratio.”
Approximately 75% of Allianz Group’s assets are invested in interest-bearing securities, and about 25% in equities. Although for the group investments the equity quota has been steadily reduced from 26.5% at the end of 2001 to 16.5%.
Separately, the German institutional asset management companies of the Group performed well. dbi has retained its position as market leader in spezialfonds, while dit gained a 12% market share of net inflows in Germany through new products in the public funds area and intensified sales support.
With regards to PIMCO, its total return fund remains the world’s leading actively managed investment fund, and increased its assets under management to 76 billion euros.
Allianz Dresdner Asset Management includes PIMCO, Oppenheimer Capital, dit, and dbi. Dresdner RCM Global Investors and Nicholas Applegate. AGF and RAS are also included with the Allianz Group.
The Allianz Group also announced today that a further 4,700 jobs would be cut at Dresdner Bank. This is in addition to the 11,000 positions to be lost as part of the job-cutting programme. The extra cuts will be in back office activities.