UPDATE 2-PIMCO asset surge powers Allianz quarterly earnings

Wed May 15, 2013 4:34pm EDT

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By Jonathan Gould

FRANKFURT, May 15 (Reuters) - Money poured into asset manager PIMCO's funds during the first three months of 2013, giving a strong boost to the earnings of its parent company, German insurer Allianz SE.

The Pacific Investment Management Company, which runs the world's biggest bond fund, recorded net inflows of third-party assets of over 40 billion euros ($51.9 billion) from January to March, nearly double those in the year-earlier quarter, Allianz said on Wednesday.

Allianz Chief Financial Officer Dieter Wemmer said the inflows highlighted a trend of customers shifting assets into the biggest money managers, particularly PIMCO, Vanguard and Fidelity.

"Everyone is looking for certainty in uncertain times and performance benchmarks play an important role," he said on a conference call with journalists.

PIMCO saw double the net inflows of Vanguard in the first quarter, with Fidelity coming in third, he said.

A Vanguard spokesman said late on Wednesday that the company saw net inflows of $52 billion into its U.S. funds in the first quarter.

The range of products on offer was also playing a role, Wemmer said. While PIMCO's Total Return Fund had seen light outflows so far this year, customers were turning to new products that would deliver good results when a downward shift in interest rates ends.

"The winner takes it all is what you see in the American asset management market at the moment," Wemmer said, declining to forecast how the trend in investor flows would develop.

The surge in third-party inflows at PIMCO helped drive Allianz's total assets under management to a record 1.9 trillion euros. Operating profit at PIMCO rose by 54 percent to almost 800 million euros, with performance fees rising alongside asset volume.

Allianz's asset management business, which also includes Allianz Global Investors, contributed 900 million euros of the group's 2.8 billion euros in operating profit in the first quarter, outshining results from Life and Health insurance.

Europe's biggest insurer had already given preliminary figures for the first quarter on May 7, saying all its divisions contributed to a near-20 percent rise in group operating profit.

Despite the strong quarterly performance, Allianz cautioned that it was too early to think of raising its operating profit guidance for 2013, which now stands at 9.2 billion euros, plus or minus 500 million euros.

Damage claims from natural catastrophes and the euro debt crisis could potentially hurt earnings, Wemmer said.

"We are still living in a very volatile world," he added. ($1 = 0.7705 euros) (Reporting by Jonathan Gould.; Editing by Harro ten Wolde, Tom Pfeiffer and Andre Grenon)

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