LONDON: Europe’s largest insurer Allianz signalled it might return cash to shareholders after reporting forecast-beating quarterly earnings yesterday and the first positive flows into US bond fund manager Pimco in more than three years.
The performance follows strong quarterly profits from European rivals Zurich and Generali as insurers adjust their strategies and investment portfolios to cope with low interest rates.
Pimco reported third-party net inflows of 4.7 billion euros ($5.1bn) in the third quarter, advancing for the first time since the second quarter of 2013.
Allianz quarterly net profit rose from a year earlier to 1.86bn euros, above the average forecast of 1.58bn euros,
Allianz confirmed its full-year target for operating profit of 10.5bn euros, plus or minus 500 million euros.
Globally, mutual fund assets under management had risen 6.9 per cent in the year to end-September, data from Lipper showed, with most of the money – $410bn – heading into bond funds.
Pimco has experienced several years of cash withdrawals in several of its main funds, including its flagship Pimco Total Return Fund. Co-founder Bill Gross, known as “the Bond King” during his years at Pimco, left in 2014 for Janus Capital.
Pimco has hired Emmanuel “Manny” Roman from Man Group, the world’s biggest listed hedge fund, as its chief executive. Roman started at the bond manager only last week.
The insurer has 2.5 billion euros available for acquisitions by the end of the year and any unused M&A budget could go on share buybacks, chief financial officer Dieter Wemmer said.
“There are a lot of things that might be interesting for us but the M&A market is not particularly active,” he said.
Any asset management acquisition had to fill a gap in coverage by Allianz’s two fund managers, Pimco and Allianz Global Investors, Wemmer said.