U.S. Markets open in 7 hrs 7 mins

Shareholder blasts Allianz over Pimco worries

* "Pimco's halo is crumbling," says Allianz investor

* Points to flagship fund's heavy capital outflows

* Allianz shares underperforming against benchmarks

MUNICH, May 7 (Reuters) - Union Investment, a major investor in Allianz, blasted the German insurer on Wednesday over its handling of problems at its fund manager Pimco, saying the fund's poor performance was denting the Allianz share price.

Pimco has been losing billions of dollars in outflows from its flagship bond fund - the world's largest - and concerns have been accentuated by a high-profile falling out between Pimco founder Bill Gross and his presumed successor Mohamed El-Erian, who quit the firm this year.

"Pimco's halo is crumbling, and with it Allianz's share price," Union Investment portfolio manager Ingo Speich said in the text of a speech to Allianz's annual shareholder meeting in Munich.

Speich, whose company is Allianz's tenth-largest shareholder, according to Thomson Reuters data, pointed out that Allianz shares has underperformed both the STOXX Europe 600 insurance index and the German blue-chip DAX index by about 5 percent since the start of the year.

"Pimco has been in poor shape for 12 months already and this has led to massive capital outflows," Speich said.

"But it is only since Mr El-Erian announced his departure from Pimco earlier this year and ugly details of the quarrel with Mr Gross became public that there have been worried looks directed at Newport Beach," he said, referring to Pimco's California headquarters.

Addressing himself to Allianz Chief Executive Michael Diekmann, Speich said: "Allianz offers an insurance policy against reputational damage that Pimco could make good use of now."

"What are you going to do to finally get Pimco out of the negative headlines? Are you going to get more involved at Newport Beach?" (Reporting by Jonathan Gould; Editing by Carmel Crimmins and David Goodman)