acquisition of pimco - allianz · • strong european asset management manager operations •...

Acquisition of PIMCO

Munich, November 1st, 1999

Cornerstones of a strategic transaction

4 Profiles

4 Transaction rationale

4 Deal structure

Allianz PIMCO• Largest global insurance company • Third largest quoted US fund• Strong European asset management manager

operations • Specific fixed income manager• Strong European presence • Excellent track records across

multi-products

• 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

Agenda

4 Profiles


4 Deal structure

Allianz: a global insurer and asset manager

AllianzEuro 70 bn market

capitalization106,000 employees

68 countries

ProtectionNon-life

insurance

ProvisionLife and health

insurance

PerformanceAsset

management

46 Euro bn premiums written (IAS, 12/98)- thereof non-life: 66%- thereof Europe: 85%

366 Euro bn AuM (6/99)

Profiles

Allianz: asset management coordinated by AAMas 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 1st in Micropal-Award

Asset mix of total AuM 366 Euro bn

Product mix of third-party AuM 42 Euro bn

Fixed Income

66%

Equity31%

Others3%

Retail34%

Unit-linked Products

20%

External Managers

21%

Institutional25%

Profiles

Allianz: strong distribution in Europe

Germany 14,000 30,000

France 2,950 300 4,250

Spain 12,000 350

Italy 2,200 1,000

Greece 2,800 3,700

Austria 1,700 50

Total 35,650 1,700 37,950

General Specialized Othersales force financial advisors financial advisors*

*) Includes part time agents

Source: Allianz company data

Profiles

PIMCO: one of the best known US-asset managersas 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

• 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

Asset mix of total AuM 256 US$ bn

Product mix of total AuM 256 US$ bn

Source: company information

Fixed Income

63%

Equity36%

Money Market

1%

Institutional Mutual Funds19%

Retail Funds19%

Institutional Separate Accounts

62%

Profiles

PIMCO: a wide array of capabilitiesas per 09/30/99

Stocks Growth

PIMCO Equity

Advisors AuM: 6.2 US$ bn

PIMCO Group

BondsTotal Return

Stocks Value

Stocks Quantitative

Stocks GARP

RetailDistribution

Stocks Value

Pacific InvestmentAuM: 181.5

US$ bn

OppenheimerCapital

AuM: 55.7 US$ bn

ParametricAuM: 3.9 US$ bn

Cadence Capital

Management AuM: 6.5 US$ bn

PFD (PIMCO

Fund Distributors)

NFJ AuM: 2.2 US$ bn

Source: company information

Profiles

Fiscal year ending December 31st CAGR

1996* 1997* 1998 Q3 1999 96-98

AuM (US$ bn) 158 200 244 256 24%

Revenues (US$ mn) 567 705 852 243 23%

EBITDA (US$ mn) 211 261 302 86 20%

Margin 37% 37% 35% 35%

PIMCO: key financials show strong growth

*) Pro forma including Oppenheimer Capital Source: company information

Profiles

Agenda

4 Profiles


4 Deal structure

Growth of asset management for third parties as third core business of Allianz

Superior management of insurance assets

Broadening the scope of equity operations

Strong presence in the important US-market

Expansion into the growth markets Europe and Asia

Expansion into Emerging Markets

Allianz PIMCO

Goals of Allianz and PIMCO are perfectly meshed

Building on fixed income investment expertise and brand

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


Creating a single global competitor

Performance of Additional revenues for Allianz’ fixed income assets owing to PIMCO’s insurance assets superior fixed income asset management capabilities

Equity styles ‘Value’ style of Oppenheimer contributes to Allianz’ portfolio management approach

Brand Substantial improved brand awareness with global institutional investors on account of PIMCO brand

European Distribution of PIMCO products through Allianz’ European institutional distribution and retail distribution network

Expansion Combined resources and easier penetration into Asian market by jointin Asia development of Asian strategy

Know-how Increased product breadth and product know-how for both partners


Allianz-PIMCO becomes a top 10 asset manageras per 12/31/98

1 UBS Switzerland 1,1452 Fidelity US 7863 Kampo Japan 7024 Credit Suisse Switzerland 6805 AXA Group France 6556 Allianz+PIMCO Germany 6477 Barclays UK 6168 State Street US 4959 Merrill Lynch US 48910 Vanguard US 448

. . .

. . .

11 Allianz Germany 403. . .

. . .

29 PIMCO US 244

Source: Pensions & Investments/ Watson Wyatt

Rank Firm Country Total AuM (US$ bn)


Allianz and PIMCO will have significant presence in major investment markets worldwide


The transaction will generate a significant know-how transfer between USA, Europe and Asia

Jointdevelopmentof Asia

Mat

urity

of m

arke

t US

Asia

Europe

Transferknow-how / people in• Portfolio management• Research• Operations• Direct distribution

Anticipated time of development


Agenda

4 Profiles


4 Deal structure

Allianz acquires approx. 70% of PIMCO for 3.3 US$ bn

Deal structure

Target PIMCO Advisors L.P

Price per unit 38.75 US$

Number of units Approx. 85 mn (≈ 70%)

Aggregate price 3.3 US$ bn

Payment Cash

Closing Expected in March 2000

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 AuM1 1.8%

=> Price / 1999e EBITDA1 14.5x

1 Forecast: Putnam, Lovell, de Guardiola & Thornton, Inc.

Deal structure

Financial impact on Allianz*

Deal structure

Financing Pure debt financing (probable components: exchangeable, straight bond, internal group financing)

Rating No change of S&P ‘AAA’-rating expected

Goodwill Tax-effective amortization over 15 years

Earnings per share 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

Organizational structure of Executive Committee

Functions of Executive Committee• Overall Allianz-PIMCO business strategy and planing• Allocation of capital• Liaison with other Allianz executive and line functions

Bill ThompsonPresident of

AAMCEO PIMCO

Markus RiessCOO of AAMHead, Retail Distribution

Udo FrankCo-Head

Global Equity

Ken PooveyCo-Head

Global Equity

K.-H. LoweCFO

Allianz Leben

Bill GrossCIO PIMCO

Joachim FaberCEO of

AAMChairman

DeputyChairman

Non-executive Ex-officio

Deal structure

acquisition of pimco - allianz · • strong european asset management manager operations •...

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