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Allianz Annual Report 2012

Allianz Group24 business, top management’s doors are wide open to them: “At PIMCO we manage assets worth a total of two trillion U.S. dollars. We have substan- tial bond holdings from many different companies – so many of these companies want to meet with us as much as we want to meet with them.” Back at the credit team portfolio review meeting, Kiesel continues: “We should buy bonds from companies that have the strongest ability to organically de-lever through cash flow generation.” He recommends buying securities from companies that have higher debt profiles – some- thing people may find incomprehensible. (Leverage is a ratio between debt capital and equity capital.) But the logic behind Kiesel’s investment philosophy becomes clear as he asks one staff member after another to present companies that meet his criteria. “Company XYZ has a leverage of 4.5x,” reports the first ­colleague he calls on. “And how high will their profit growth be in the next two years?,” he asks. “We expect 15 – 20 percent,” she answers. “XYZ gathers and processes oil and natural gas in the major ‘shale’ regions across America. So XYZ is profiting from the current boom in U.S. oil and natural gas production.” “ You need determination, a work ethic and the abilities of a chess player. What makes us so success- ful at PIMCO is that we’re usually five or six moves ahead” Mark Kiesel, global head of the corporate bond portfolio management group AT PIMCO, NEWPORT BEACH, USA As he does every Friday, Mark Kiesel (front) asks one staff member after another to suggest companies that meet all the criteria of PIMCO’s invest- ment philosophy.