Merger mania? Not here, says AllianzGI CEO

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AllianzGI CEO Tobias Pross delivering his strategy update in Frankfurt last Tuesday. Photo: IO.

In an era of industry consolidation and shrinking margins, Allianz Global Investors is choosing defiance over dependence.

As rivals explore mergers and exits, the Frankfurt-based asset manager is staking its future on autonomy, private markets and a deepening embrace of artificial intelligence.

Addressing journalist from across Europe at during a 30-minute strategy update held last week in Frankfurt, chief executive Tobias C. Pross firmly rejected speculation about a merger or divestment. Investment Officer attended the briefing.

“I feel confident of where I am,” chief executive Tobias C. Pross said, firmly quashing speculation about a potential merger or divestment. Overlooking Frankfurt’s skyline and the ECB tower, Pross offered a confident view of the firm’s trajectory, and why it does not need to align its future with another firm’s.

‘Quality leads the pack’

“We truly believe with what we have under the belt, with the talent we have here available for our clients, what’s not to like?” he said, answering a question from Investment Officer. ”And you also see that our clients seem to like it in terms of being the overall quality leader. Not one of the merged or the synthetic asset managers, as you also technically could call them, is leading the pack. It’s us.”

Since it was established as a global investment firm in 2012, AllianzGI has more than doubled its assets under management, reaching 571 billion euros in the fourth quarter of 2024, up from 279 billion euros twelve years earlier. Roughly 461 billion euros is managed out of the EMEA region, with 35 billion euros sourced from Asia-Pacific, and a growing contribution from North America, which adds 75 billion euros to the mix.

But numbers only tell part of the story. AllianzGI is leaning hard into private markets, which now account for 17 percent of its business. The firm is on track to hit the 100 billion euro mark in private markets under management. “It’s still a hot cookie,” Pross said with a grin, describing the surge in client demand for alternative assets. “We are very serious about this… so if we do it, we do it right.”

Pivot towards private markets

This strategic pivot toward private markets comes at a time when industry peers are grappling with squeezed margins, product commoditisation, and regulatory pressure to integrate ESG standards. AllianzGI sees opportunity in that chaos, particularly in private credit, infrastructure debt, and new long-term vehicles such as Eltifs.

Meanwhile, Pross is investing heavily in data and AI technology to differentiate the client experience. Internally, AllianzGI uses AI tools that can analyse CFO earnings calls to assess sentiment based on voice tone. “You may say it’s a little bit spooky, but it really works,” said Pross.

AllianzGI is also focused on public markets, particularly in Asia and India, where Pross said clients require deep expertise and insight in less developed markets. A recently launched Indian equities fund has performed “extremely well,” he noted.

Active ETFs in Taiwan first

The firm is preparing to roll out active ETFs, starting in Taiwan where AllianzGI is already the market leader. Pross said Taiwan’s regulatory framework allows for the efficient and fast setup of active ETFs, making it a natural launch market. Europe is next, he added.

Asked whether passive products were eroding fees too far, Pross was clear: “If you truly believe that passive is cheap, I need to disappoint you.”

On the subject of industry consolidation, Pross avoided naming names. Media reports earlier this year suggested a potential merger with Amundi, Europe’s biggest asset manager, but subsequent reporting indicated those discussions had ended.

‘No comment’

“We do not comment on speculation and rumors,” Pross said, when asked about the Amundi talk. But he added, “I take some pride in that people are always interested in us,” and emphasised AllianzGI’s strong position within the parent group.

He pointed to five years of consistent growth and success since taking the helm. “First of all, as you have seen, we did grow over the last five years,” he said. “Four of them have been the most successful since inception of our firm.”

The company is committed to growing organically, but is open to bolt-on acquisitions, especially in private markets. “If there are opportunities to grow inorganically and it fits to our platform and our strategy, absolutely we’ll look into it.”

Sustainability

Sustainable investing may be under pressure globally, but Allianz Global Investors is not backing down. “Sustainability has been one of our strategic pillars, and it is still one of our strategic pillars,” said Tobias Pross. “The world really has changed. That’s very sad. But we are completely committed.”

Roughly €200 billion — close to half of AllianzGI’s total assets — is managed under SFDR Article 8 and 9 classifications. About 70 percent of this is retail capital. “I truly believe that sustainability can help your portfolios to really perform better outcomes in multiple ways,” said Pross. “And this is not only about performance.”

Still, he acknowledged that the rollout of EU ESG regulations has been uneven and fragmented. “If you talked to AMF or BaFin at the very early stage, you got completely different answers,” he said. “That caused a delay.”

Adidas

Pross emphasised that AllianzGI’s commitment to sustainability also extends to active stewardship. He cited the asset manager’s decision to vote against the reappointment of Adidas chairman Thomas Rabe. “We take this supervisory board extremely serious,” said Pross. “And if you are overboarded, you are overboarded. We have our stance and our policy on it, which we will not delegate or water it down at any stage.”

At Adidas’ annual general meeting last Thursday, AllianzGI voted against Rabe’s reappointment due to concerns about his multiple board positions. Rabe was ultimately re-elected with 64.4 percent of the vote.