PIMCO, Allianz Real Estate Ink Deal, Becoming One Of World's Largest CRE Managers
Newport Beach-based PIMCO will oversee parent company Allianz's real estate investment and asset management arm, Allianz Real Estate, the companies said Tuesday.
The proposal still needs some regulatory approvals, but if approved, PIMCO will have more than $100B in real estate assets under management around the world. Overall, PIMCO oversees about $1.9 trillion in assets under management as of Dec. 31, 2019.
“Real estate has been, and will continue to be, central to the development of our private strategies platform, which we consider essential to providing our clients with alternative approaches to achieving their long-term investment objectives,” PIMCO CEO Emmanuel Roman said in a statement. “By incorporating Allianz Real Estate into PIMCO’s existing suite of private solutions, we intend to significantly enhance our capabilities in an area that has become a critical component of our clients’ portfolios.”
The news comes less than a week after Allianz Real Estate reported record growth and expansion in Europe and the Asia-Pacific region. The company saw its assets under management increase by 16% year-over-year to €73.6B, equity investments jumped 20% to €52.9B and debt financing increase by 8% to €20.7B. Allianz Real Estate has 440 employees worldwide.
A PIMCO spokesman said the deal will help the companies grow.
"At a time when scale is an increasingly important determinant of success, our pro forma real estate business will amount to $100B+ in AUM, giving us the ability to pursue larger transactions, attract and retain top talent, and benefit from stronger sourcing and asset management networks around the world," PIMCO Global Head of Corporate Communications Michael Reid wrote in an email to Bisnow.
Reid added that PIMCO’s and Allianz Real Estate’s real estate businesses are highly complementary. PIMCO, Reid said, has historically focused its real estate private equity and debt businesses on opportunistic and value-added investing, in addition to the commercial real estate markets. Allianz Real Estate has built its franchise around primarily core and core-plus private investments, he said.
Reid added that Allianz Real Estate brings a larger and deeper footprint in Europe and Asia, which complements PIMCO’s businesses in the U.S. and Europe and growing interest in Asian markets.
"We expect to enhance [Allianz Real Estate’s] strong bottom-up investment capabilities with PIMCO’s time-tested macroeconomic, relative value, and analytics approach, as we have done with BRAVO [funds] and our other private strategies," Reid wrote. "Over time, we expect to use our expanded scale and investment capabilities in real estate to develop new products and new client relationships. Real estate is a substantial, and rapidly growing, area of alternative investment for our institutional and [global wealth management] clients."
Reid said the deal needs to be finalized and receive regulatory approvals, along with the involvement of employee representatives in Continental Europe. He said in the coming months, PIMCO and Allianz Real Estate officials will meet, chart a path and create a timetable for bringing both businesses together.
