Under fire bond guru Bill Gross received the support of his management team on Friday with Dieter Wemmer, the chief financial officer of German insurance giant Allianz (XETRA:ALV-DE), backing him to turn around the asset management company's fortunes.
Outflows from California-based Pimco (Pacific Investment Management Company) continued to weigh on Allianz's results despite the German firm posting a 10.5 percent rise in second-quarter net profit on Friday. Pimco's Total Return Fund, the world's largest bond fund which is managed by Gross, had net outflows of $830 million in July, marking its 15th straight month of outflows, according to data from Morningtsar.
Wemmer said that despite the outflows Pimco was "recovering nicely" and used a mid-term metric to show that 89 percent of PIMCO's assets under management have outperformed their benchmarks on a three-year basis.
"Bill is working hard on the recovery," Wemmer told CNBC Friday, adding that institutional investors are sticking with the bond fund. "Retail money is leaving, the retail customers are more sensitive to newspaper articles."
He added that Gross' fund was still delivering reasonable returns and wouldn't be drawn on whether there could be any management changes at the U.S. company that is majority owned by Allianz.
"I think we have a strong bench there," he said. "There's an external perception that Pimco is about Bill Gross. We have a really great team."
Allianz has come under intense shareholder scrutiny over reports of management turmoil at Pimco, following the unexpected resignation of its chief executive, Mohamed El-Erian, in January. Since then, Pimco has installed six deputy chief investment officers in El-Erian's stead.
Pimco also rehired Paul McCulley as chief economist back in May, returning to the fold where he once held the role of portfolio manager. Wemmer said that it was too early for McCulley to have had any impact on revenues but said that he is "helping our media work."
Despite the weakness in its asset management units, which saw a 16 percent fall in operating profit for the quarter, Allianz reported market-beating earnings for its second period. It said was on track to report record earnings for 2014.
- Mutual Funds
- asset management company
- Bill Gross