(Replaces incorrect percentage comparisons in paragraph 4 with actual outflow figures)
* Asset management operating profit down 28 percent
* Pimco performance fees fall to 11 mln eur from 252 mln
* Allianz on target for 2014 group operating profit target
* Shares rise 0.66 percent
FRANKFURT, May 14 (Reuters) - German insurer Allianz saw operating profit in its asset management arm slump by more than one fourth in the first quarter as its California-based Pimco unit suffered 21.7 billion euros ($29.7 billion) in investment outflows.
Performance at Pimco, which has been an Allianz cash cow for years and runs the world's biggest bond fund, has become an increasing concern following the departure of its Co-Chief Investment Officer Mohamed El-Erian earlier this year after a clash with Pimco founder Bill Gross.
Allianz on Wednesday said institutional clients had joined retail investors in withdrawing funds at Pimco, whereas last year it said withdrawals stemmed mainly from the retail side.
However, Pimco's outflows in the latest quarter narrowed from 29 billion and 36 billion euros in the third and fourth quarters of 2013.
"We are on a good path toward consolidation," Allianz Chief Financial Officer Dieter Wemmer said of the decline in outflows, in a call with journalists.
DZ Bank analyst Thorsten Wenzel also noted the change.
"Asset Management net outflows are still on a high level but at least not as high as in Q4 2014," he said in a research note.
Allianz already reported preliminary earnings for the first quarter last week, saying it was on track to achieve its full-year group operating profit target of 10 billion euros.
Operating profit in asset management fell to 646 million euros from 900 million in a strong year-earlier quarter, with performance fees at Pimco falling by 96 percent.
"Asset management operating profit was a tick worse than we had expected on the basis of preliminary data," said LBBW analyst Werner Schirmer in a note to clients.
Allianz's share rose 0.4 percent to 122.40 euros by 0750 GMT, outpacing a flat STOXX Europe 600 insurance index.
"As expected, the results in Asset Management came in lower, but the business is in line with our target for the year," Wemmer said.
Allianz is one of the world's biggest fund managers, with 1.3 trillion euros in third-party assets under management at the end of the first quarter. Pimco represents the lion's share of those assets, at 1.1 trillion euros. ($1 = 0.7296 Euros) (Reporting by Jonathan Gould; editing by Thomas Atkins and Tom Pfeiffer)