Allianz Global Investors reports profitable growth for 2007

AllianzGI, the asset management subsidiary of Allianz SE, reported increased profits and a strong investment performance for 2007. In a year marked by a tough economic climate and market volatility, the striking features that emerge from 2007 are AllianzGI’s continuing profitable growth and the sustained strong investment performance of its equity and fixed income businesses.

AllianzGI's operating profits rose to 1.32 billion euros, showing an increase of over 22 percent per annum over the 6-year period 2002 to 2007 (2002 was the first year that AllianzGI independently reported results). AllianzGI grew operating earnings in 2007 by four percent over 2006. These figures were impacted by the US dollar depreciation, on an FX-neutral basis the growth was 11 percent.

Excellent investment performance was achieved across the business with 86 percent of AllianzGI assets ahead of the relevant three-year benchmarks.

In 2007, AllianzGI delivered innovative investment and retirement solutions for its clients based on strong quantitative tools supported by high alpha generating investment teams. Anticipation of the subprime market crisis enabled PIMCO to strengthen its position as one of the world’s leading fixed income managers.

With 970 billion euros of assets under management (AuM), of which 725 billion euros are third-party assets, AllianzGI retains its ranking as a top-five global active investment manager.

AllianzGI’s long-term strategy is based on three pillars: product quality delivered through strong investment performance, client focus and profitability.

AllianzGI delivered excellent investment performance in 2007 with 86 percent of third-party AuM over a three-year period outperforming their relative benchmarks. Of this, 87 percent of third-party fixed income AuM and 79 percent of third-party equity AuM were ahead of benchmarks.

By adhering to its investment philosophy and defensively positioning its portfolios in anticipation of the subprime crisis, PIMCO, a company of AllianzGI, protected its clients - including the largest client, Allianz Group. This contributed to Bill Gross and the PIMCO investment team being named the "Morningstar 2007 Fixed Income Manager of the Year" for the third time. Bill Gross, founder and CIO of PIMCO, said: "Our long experience enabled us to anticipate the market turmoil and to be in the right position when markets started moving into crisis."

In addition to AllianzGI’s strong performance in fixed income, AllianzGI’s equity managers continued to build sustainable long-term performance records. AllianzGI continued to develop and expand its product lines with innovative solutions for clients, which the company believes will translate into new business in the near term.

AllianzGI’s operating profits continued their growth into 2007 increasing at 22 percent per annum from 2002 to 2007. From 2006 to 2007, the operating profit increased from 1.28 billion to 1.32 billion euros. The company was able to maintain its excellent level of profitability, as reflected by its cost-income ratio of 58.4 percent in 2007. Additionally, AllianzGI positioned itself for future success by investing in strengthening its distribution networks in Europe, the US and in Asia Pacific.

Joachim Faber, CEO of AllianzGI, commenting on the company’s overall performance, said: "The economic and investment climate in 2007 was tough for all participants in the markets. Naturally, we are very pleased with our achievements in 2007 both in terms of our growth in operating profits and assets under management, and also with the results of our initiatives in the area of client relationships, which are already paying dividends."

Faber continued: "It is our disciplined approach to investing that enabled us to successfully navigate the difficult markets in 2007 to the considerable benefit of our clients. We look forward to working with our clients in 2008 to provide them with the solutions they require. While we are positive about the coming year, there is, however, no room for complacency. We’re proud to be a top-five global asset manager, but we intend to improve further and are raising the bar yet again for client service, investment performance, product innovation, and delivery of value to our shareholder."