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(Reuters) — Bill Gross' departure from investment firm Pacific Investment Management Co. L.L.C. could lead investors to pull hundreds of billions of dollars in assets from its parent company, Allianz S.E., and invest them with Janus Capital Group, the rival firm that Mr. Gross is joining, a Morningstar analyst said Friday.
"We expect to lower our fair value estimate, as it is likely that tens of billions, if not hundreds of billions in AUM, will follow Gross to Janus from Allianz," Morningstar analyst Vincent Lui said in a report on the Morningstar website Friday.
Morningstar, a fund research firm, said it was placing Allianz, the German insurer that owns Pimco, under review while Morningstar assesses the impact of Mr. Gross' departure.
Mr. Lui cited DoubleLine Chief Executive Jeffrey Gundlach's 2009 departure from asset manager TCW as a "possible model" for flows behavior, noting Mr. Gundlach's firm now has over $50 billion in assets.
Mr. Gross, Pimco's chief investment officer whose $222 billion Pimco Total Return Fund is the world's largest bond fund, quit Pimco for Janus on Friday, the day before he was expected to be fired from the huge investment firm he co-founded more than 40 years ago.
Investors have already pulled almost $70 billion from Mr. Gross’ flagship mutual fund from May 2013 through August 2014, according to Morningstar data, reducing the fund's assets from a peak of $292.9 billion in April 2013.
Analysts have said cash outflows began last year due to weak returns. Mr. Gross' public falling-out with former heir-apparent Mohamed El-Erian, who shared the co-chief investment officer title, exacerbated investors' unease.
Mr. Lui of Morningstar was not immediately available for comment.
(Reuters) — Problems at Allianz S.E.'s U.S. investment firm, Pacific Investment Management Co. L.L.C. persisted in the second quarter as clients defected and margins slipped, posing a challenge for the chief executive of Europe's biggest insurer, who aims to make a record group profit this year.