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Sanford Bernstein: Allianz Missed The Boat With Its Pimco Unit


Allianz SE (OTC: AZSEY), the German-based financial services company, may have missed the boat with the departure of William Gross from its U.S. assent management unit Pimco.

Gross quit his post as chief investment officer for Pimco Friday amid reports the 70-year-old celebrity asset manager was about to get fired for performance issues and increasingly erratic behavior that included penning an investment letter that included an ode to his dead cat.

"It's too late now for Allianz to do an IPO of Pimco," Sanford Bernstein's Thomas Seidl said ruefully in a research note.

Allianz depositary shares fell more than 6 percent Friday in over-the-counter trading. Janus Capital Group Inc. (NYSE: JNS), where Gross will manage a bond fund, jumped nearly 40 percent Friday to $15.42 per share.

Seidl figures Gross's departure could spark an outflow of assets at Pimco of between 10 percent and 30 percent. That could drag down Allianz shares by 2 percent to up to 13 percent.

Although it may be too late for Allianz to cash in with a Pimco offering, Seidl "sees no need" for an insurance company to own an asset manager, with synergies between the two operations are "rather limited.

Meanwhile Credit Suiss's Craig Siegenthaler reiterated an Underperform rating on Janus but boosted his target to $17.25 from $14.

Siegenthaler said there's "significant uncertainty" surrounding the arrival of Gross at Janus.

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