Allianz SE’s fund management arm should be profitable this year and next as its large holdings of fixed-income assets help shield it from global market turmoil, a top executive with the unit said on Thursday.
“We expect to be profitable this year,” Marna Whittington, chief operating officer of Allianz Global Investors, told Reuters. “I would expect us to be profitable in 2009 and there are a couple of reasons: First we have very large scale; secondly, a large proportion of our assets are fixed income, and fixed income markets aren’t suffering the same corrections (as stocks).”
She said profit margins at the unit of Europe’s largest insurer were being squeezed by the downturn and in a bid to control costs it had a “soft freeze” on new hires. Bonuses are also expected to fall from last year, she said. But Whittington said there were no current plans for widespread job cuts given that it wants to maintain fund performance and customer service levels. “We want to be top quartile in profitability through a full market cycle, which means we’re very willing to take profit margin pressure in times like this,” she said.
Allianz Global Investors, which controls a stable of fund managers including fixed-income giant PIMCO, had €970 billion of assets under management at the end of last year. (Reuters)