Acquisition of PIMCO. Munich, November 1 st, 1999

Transcription

1 Acquisition of PIMCO Munich, November 1 st, 1999

2 Cornerstones of a strategic transaction 4 Profiles Allianz Largest global insurance company Strong European asset management operations Strong European presence PIMCO Third largest quoted US fund manager Specific fixed income manager Excellent track records across multi-products 4 Transaction rationale 4 Deal structure Become a global asset management business ranking among the top 10 asset managers with more than 600 US$ bn AuM Create a pre-eminent global fixed income manager under the leadership of PIMCO Create a strong multi-style equity operation under the leadership of Allianz Approximately 70% of PIMCO Advisors L.P. purchased for 3.3 US$ bn Closing March 2000, following PIMCO unit holder vote Slightly dilutive in 2000, accretive from 2003 onwards Page 1

3 Agenda 4 Profiles 4 Transaction rationale 4 Deal structure Page 2

4 Profiles Allianz: a global insurer and asset manager Allianz Euro 70 bn market capitalization 106,000 employees 68 countries Protection Non-life insurance Provision Life and health insurance Performance Asset management 46 Euro bn premiums written (IAS, 12/98) - thereof non-life: 66% - thereof Europe: 85% 366 Euro bn AuM (6/99) Page 3

5 Profiles Allianz: asset management coordinated by AAM as per 06/30/99 Coordination of global Allianz asset management activities by Allianz Asset Management GmbH (AAM) Global investment products with access to regional expertise More than 250 managed funds worldwide Strong investment track record: 1998 for example 5 times ranked 1 st in Micropal- Award Equity 31% External Managers 21% Unit-linked Products 20% Others 3% Institutional 25% Fixed Income 66% Asset mix of total AuM 366 Euro bn Product mix of third-party AuM 42 Euro bn Retail 34% Page 4

6 Profiles Allianz: strong distribution in Europe General Specialized Other sales force financial advisors financial advisors* Germany 14,000 30,000 France 2, ,250 Spain 12, Italy 2,200 1,000 Greece 2,800 3,700 Austria 1, Total 35,650 1,700 37,950 *) Includes part time agents Source: Allianz company data Page 5

7 Profiles PIMCO: one of the best known US-asset managers as per 09/30/99 Third largest publicly traded investment manager 256 US$ bn in assets under management Leading active fixed income manager in the world Equity 36% Money Market 1% Asset mix of total AuM 256 US$ bn Fixed Income 63% 53 mutual funds for institutional and retail clients 85% of funds (AuM) are rated **** or ***** by Morningstar 1,600 institutional clients, including 1/3 of the 200 largest US corporations Superior investment performance and track record Institutional Mutual Funds 19% Retail Funds 19% Product mix of total AuM 256 US$ bn Institutional Separate Accounts 62% Source: company information Page 6

8 Profiles PIMCO: a wide array of capabilities as per 09/30/99 PIMCO Group Bonds Total Return Stocks Value Stocks Quantitative Stocks Growth Stocks GARP Stocks Value Retail Distribution Pacific Investment AuM: US$ bn Oppenheimer Capital AuM: 55.7 US$ bn Parametric AuM: 3.9 US$ bn PIMCO Equity Advisors AuM: 6.2 US$ bn Cadence Capital Management AuM: 6.5 US$ bn NFJ AuM: 2.2 US$ bn PFD (PIMCO Fund Distributors) Source: company information Page 7

9 Profiles PIMCO: key financials show strong growth Fiscal year ending December 31 st CAGR 1996* 1997* 1998 Q AuM (US$ bn) % Revenues (US$ mn) % EBITDA (US$ mn) % Margin 37% 37% 35% 35% *) Pro forma including Oppenheimer Capital Source: company information Page 8

10 Agenda 4 Profiles 4 Transaction rationale 4 Deal structure Page 9

11 Transaction rationale Goals of Allianz and PIMCO are perfectly meshed Allianz PIMCO Growth of asset management for third parties as third core business of Allianz Expansion into the growth markets Europe and Asia Strong presence in the important US-market Building on fixed income investment expertise and brand Expansion into Emerging Markets Broadening the scope of equity operations Superior management of insurance assets Page 10

12 Transaction rationale Crown Jewel transaction creates a leader in global asset management Combination of PIMCO s US market know-how with Allianz strong presence in Europe Chance to be first mover in emerging European fixed income markets beyond background of European fixed income markets structures migrating towards US fixed income market structures Allianz and PIMCO share a dedication to be a top-five competitor in their chosen markets Page 11

13 Transaction rationale Creating a single global competitor Performance of insurance assets Equity styles Brand European distribution Expansion in Asia Know-how Additional revenues for Allianz fixed income assets owing to PIMCO s superior fixed income asset management capabilities Value style of Oppenheimer contributes to Allianz portfolio management approach Substantial improved brand awareness with global institutional investors on account of PIMCO brand Distribution of PIMCO products through Allianz European institutional and retail distribution network Combined resources and easier penetration into Asian market by joint development of Asian strategy Increased product breadth and product know-how for both partners Page 12

14 Transaction rationale Allianz-PIMCO becomes a top 10 asset manager as per 12/31/98 Rank Firm Country Total AuM (US$ bn) 1 UBS Switzerland 1,145 2 Fidelity US Kampo Japan Credit Suisse Switzerland AXA Group France Allianz+PIMCO Germany Barclays UK State Street US Merrill Lynch US Vanguard US Allianz Germany PIMCO US 244 Source: Pensions & Investments/ Watson Wyatt Page 13

15 Transaction rationale Allianz and PIMCO will have significant presence in major investment markets worldwide Page 14

16 Transaction rationale The transaction will generate a significant know-how transfer between USA, Europe and Asia Maturity of market US Europe Transfer know-how / people in Portfolio management Research Operations Direct distribution Asia Joint development of Asia Anticipated time of development Page 15

17 Agenda 4 Profiles 4 Transaction rationale 4 Deal structure Page 16

18 Deal structure Allianz acquires approx. 70% of PIMCO for 3.3 US$ bn Target Price per unit PIMCO Advisors L.P US$ Number of units Approx. 85 mn ( 70%) Aggregate price Payment 3.3 US$ bn Cash Closing Expected in March 2000 Page 17

19 Deal structure The transaction is fairly priced for both partners By all metrics, the transaction is fairly priced relative to other premiere transactions Purchase price of 3,310 US$ mn => Price / 1999e AuM 1 1.8% => Price / 1999e EBITDA x 1 Forecast: Putnam, Lovell, de Guardiola & Thornton, Inc. Page 18

20 Deal structure Financial impact on Allianz* Financing Rating Goodwill Earnings per share Pure debt financing (probable components: exchangeable, straight bond, internal group financing) No change of S&P AAA -rating expected Tax-effective amortization over 15 years Dilution of approximately 0.3 Euro (EPS 1998: 7.5 Euro) in 2000, positive impact of about 0.7 Euro in 2003 Cash flow per share Positive impact of approximately 0.5 Euro already in 2000 Return on investment Return on investment - based on cash flow - exceeds Allianz cost of capital of 7.9% in 2003 *) Own estimates Page 19

21 Deal structure Organizational structure of Executive Committee Joachim Faber CEO of AAM Chairman Bill Thompson President of AAM CEO PIMCO Markus Riess COO of AAM Head, Retail Distribution Udo Frank Co-Head Global Equity Ken Poovey Co-Head Global Equity K.-H. Lowe CFO Allianz Leben Bill Gross CIO PIMCO Deputy Chairman Non-executive Ex-officio Functions of Executive Committee Overall Allianz-PIMCO business strategy and planing Allocation of capital Liaison with other Allianz executive and line functions Page 20