Johannesburg - Walk down a side alley in Munich, beneath apartments with
net curtains in the windows, past figures of female superheroes on a cafe
storefront, and you come to the unprepossessing headquarters of a $2 trillion
asset manager. On the fifth floor, an elegantly dressed woman leans forward to
field questions. She’s focused. In her hands is a coffee mug emblazoned with
the word “integrity” in six languages.
Meet Jackie Hunt, one of the most important women in
global finance. The 48-year-old South African runs Allianz’s asset management
and US life insurance divisions. In July, Hunt took over responsibility for
Pacific Investment Management, home of what was once the world’s largest
bond fund, and Allianz Global Investors. On her watch, Pimco reported its first
net inflows since 2013, ending a painful period that culminated in the
departure of star co-founder Bill Gross. Hunt doesn’t take credit for Pimco’s
revival, though. “It’s great to come in at a point in time that’s an inflection
point,” she says in an hourlong interview. “But this is a result of a lot of
effort by a lot of people before I arrived.”
A trained accountant with little background in money
management, she’s taken on a formidable challenge. The industry is under
pressure to consolidate as fees decline, ultralow interest rates erode returns,
and investors abandon active managers for low-cost passive strategies. Pimco,
the firm based in Newport Beach, Calif., that Allianz bought in 2000, could
hardly loom larger on her agenda. Three years of bleeding have cut Pimco’s
assets by about a quarter, to $1.47 trillion. Gross’s acrimonious exit in 2014
damaged the brand and fueled criticism of Allianz, which traditionally pursued
a hands-off approach to avoid antagonising its highflying fund managers.
So what in the world attracted Hunt to the job? “Going
into an organization that didn’t have a challenge wouldn’t be interesting for
me,” she says. “At Allianz, I felt I could contribute.” In her new role, Hunt
is expected to be more hands-on, overseeing the strategic direction of asset
managers to make sure they’re aligned with the group.
Her route there was full of twists and turns. Starting
out as an audit manager at Deloitte & Touche in Johannesburg, she began a
career that took her to four continents and eventually landed her in the
insurance industry in the UK At Standard Life, the Edinburgh-based insurer
where she was chief financial officer from 2010 until 2013, she and Chief
Executive Officer David Nish revamped the business model. They shifted away
from capital-heavy life insurance to fee-generating asset management, a
transformation that other insurers have since followed. According to Hunt, the
line between asset management and insurance has blurred. Clients ultimately
want the same thing: returns. “Customers don’t care about the product; they
care about the outcome,” she says. “Allianz, with a world-class life insurer
and two world-class asset managers, can provide both the protection and the
investment expertise.”
Read also: Prudential begins hunt for new CEO
People who’ve worked with Hunt describe her as smart,
respected, direct, not big on small talk—and not lacking in ambition. In 2013
she finally got the chance to run a business: At the British multinational
Prudential, she looked after the insurer’s operations in the UK and
continental Europe. That put her back in the C-suite with CEO Tidjane Thiam,
her former boss at Aviva, where she’d held several senior positions. She took
the Prudential job hoping to expand the business. “I am a fan,” Thiam says of
Hunt in a telephone interview. “It’s a combination of intellect, determination,
and courage to do difficult things.” But after barely six months, Hunt’s
ambitions were thwarted by the U.K.’s surprise overhaul of its pension system,
a move that sent sales of annuity products plunging. Thiam left in 2015 to
become CEO of Credit Suisse Group, and Prudential named Mike Wells to replace
him. Hunt, who’d been seen as a potential successor, resigned shortly after
when her growth strategy didn’t get enough backing, people familiar with the
matter say. Prudential later announced plans to cut back its UK annuities
business, saying the capital might be better deployed elsewhere.
Hunt had met Allianz CEO Oliver Bäte a few years earlier
at an insurance industry event, but their paths hadn’t crossed much until he
hired her for her current role. At Allianz she spends about two weeks a month
in Munich and the rest visiting operations around the globe, including Pimco’s
Newport Beach offices.
The two money managers she oversees are very different
animals. For decades, Pimco was Bill Gross. He co-founded the firm in 1971 and
oversaw its expansion into a $2 trillion money manager at the peak in 2013.
After clashing with other executives over the firm’s moves into stocks and real
estate, he left in September 2014. Bridling at media reports that portrayed him
as a King Lear-like autocrat, Gross initiated an internal investigation to hunt
down his naysayers. When other top investors threatened to move their money
elsewhere, Pimco’s management, backed by Allianz, closed ranks against him,
people familiar with the matter said at the time.
Gross’s departure accelerated a flight from the
once-dominant Total Return Fund, which had started to see outflows the year
before amid underperformance and a move by investors away from bonds. That left
the firm without a clear direction just as the three-decade rally in bonds that
had fueled its growth faded. In July, less than three weeks after she got her
job, Hunt had a role in poaching hedge fund veteran Emmanuel Roman from Man
Group, the world’s largest publicly traded hedge fund firm, and installing him
as Pimco’s CEO. His hiring could help expand Pimco’s offering of alternative
investments. Hunt says what she particularly likes about “Manny,” as he’s known,
is that he brings expertise in quantitative investing, machine learning,
dealmaking, and managing a complex company. For his part, according to a person
familiar with his thinking, Roman is hoping Allianz will help Pimco expand in
China.
Allianz’s other asset manager, Allianz Global Investors,
or AGI, has done well in comparison with Pimco, logging net inflows in 14 of
the past 15 quarters. Yet its cost-income ratio, a measure of profitability,
was higher at the end of the third quarter—67.3 percent, vs. 57.5 percent at
Pimco. That’s because, as a relatively small company, AGI has a higher share of
fixed costs. It follows a multimanager model, which tends to require more
spending on brand marketing and sales. And as at other asset managers, AGI’s
fees are under pressure from the shift to passive funds, where neither AGI nor
Pimco has much of a presence.
Which raises the question: Why not combine Pimco and AGI,
or at least some back-office operations, instead of having the two compete for
clients? Hunt rebuffs the idea, saying the firms are too different to make that
work. AGI, which oversees €481 billion ($511 billion) out of Frankfurt, had
been a collection of boutique managers under one roof. “Pimco is the exact
opposite,” she says, adding, “we are committed to the two-pillar strategy.”
Analysts say there’s more Allianz could do to help sell
the products of its money managers. “Leveraging synergies between insurance and
asset management will be a key opportunity for Jackie Hunt at Allianz,” says
Marc Thiele, a consultant who was formerly an insurance analyst at Mediobanca,
UBS, and other firms. Hunt says Allianz and AGI are jointly exploring ways to
service retail clients in places where there’s demand and where the companies
don’t have a big enough presence, such as Asia.
Toward the end of the interview, Hunt talks about how
being a mother of two teenagers has taught her patience. She says she likes to
know what makes people tick. She’s also learned that being dogmatic creates
unnecessary conflict. Only time will tell if these life skills prove useful in
overseeing her new charges.
BLOOMBERG