One Pimco client withdraws €17 billion in Q2

The world's largest bond fund manager sees €28 billion in outflows during the first half of 2016 but insists flows are steadying.

Pimco – the world’s largest bond fund manager – saw €18 billion in outflows in the second quarter of 2016 as one single client withdrew €17 billion.

In an earnings call with investors today, Dieter Wemmer, chief financial officer of Allianz Global Investors – Pimco’s parent company – said simply that the single client withdrawal was because the investor “needed the money for something else.”

In the interim report, the company added that institutional investors had reallocated their assets in the second quarter of the year.

It outlined: “Expected strategic asset re-allocation of a few large institutional customers ‘crystallised’ in larger negative flows in April, May and June in line with trend of continuously declining net outflows.”

Net outflows for the second three months of 2016 stood at €18 billion, up from the €10 billion witnessed in Q1.  However, the first half of 2016 saw outflows totaling €28 billion, far better than the €97.6 billion which left the group in the same period last year.

Income at the firm declined by 2.5% to €29.4 billion in the second quarter of 2016, compared to €30.2 billion for the same quarter in 2015.

Chief executive officer, Oliver Bäte concluded: “In Asset Management, operating profit remained almost at the level of the previous year and the net outflows at Pimco have slowed, but we have not yet reached our goals.”

Pimco has struggled with outflows at the business since the departure of respected so-called “bond king” Bill Gross who sensationally quit to join rival Janus Capital Group at the end of September 2014.