Newport Beach-based Pacific Investment Management Co. is gaining more autonomy from German parent Allianz SE, but officials downplay talk of a bigger split or even a public offering via a spinoff.
“I don’t think so,” said Neel Kashkari, a managing director who was hired a year ago to lead the bond fund manager’s push into stock funds. “Our structure with Allianz works very, very well.”
Pimco, which manages $1.2 trillion in investments, made a move last month that put some room between it and Allianz—and sparked speculation in the financial media.
Pimco took over sales of its mutual funds from its parent, with plans to open a brokerage in New York and take on 170 people from Allianz.
The move comes as Pimco, best known for investing in government, corporate and other bonds, is expanding its funds.
Pimco started an exchange-traded fund—a mutual fund that trades like a stock—for U.S. investors in 2009. It now is one of the largest here with more than $2 billion in money from investors, according to New Jersey’s National Stock Exchange, a trader of ETFs.
Early last year, Pimco launched its first actively managed stock mutual fund, where managers handpick investments. The Pathfinder fund—which searches the globe for what its managers consider undervalued stocks—has $1.8 billion in investments.
The company plans to debut a second stock mutual fund, with a focus on emerging markets, in coming months. More are expected in coming years.
Allianz has called Pimco’s moves “a natural part” of its push into stocks and other investments.
Kashkari—a senior adviser to former Treasury secretary Henry Paulson and lead architect of the $700 billion Troubled Asset Relief Program—was brought on to develop Pimco’s stock strategy.
Allianz acquired Pimco in 2000 for some $3.3 billion. The bond manager had $200 billion in assets under management at the time.
Pimco got its start in 1971 as a unit of Newport Beach-based Pacific Life Insurance Co. It broke off from Pacific Life in the early 1990s and went public in 1994.
Pacific Life had held a minority of Pimco—a slice worth as much as $2.1 billion in 2002—and sold its remaining $288 million stake in 2009.
Pimco is the largest U.S. investment manager owned by an insurer or bank.
Allianz has “given Pimco a lot of room to run,” Kashkari said.
“It’s a relationship and structure that has proved to be highly effective over the last 10 years. I don’t see any reason why it would change,” he said.
As for speculation that Pimco’s recent moves mark a new independent streak, “I call it more control,” Kashkari said.
At a Glance
Pimco
Headquarters: Newport Center<br >Business: mutual funds<br >Under management: $1.2 trillion<br >Largest fund: Total Return, $241 billion<br >Fund types: bond, stocks, ETFs, other<br >Started: 1971<br >Acquired: 2000, by Allianz
