Allianz Europe Equity Growth AT EUR |
Morningstar's Take
|07/11/2024by Ronald van Genderen
| On Oct. 11, 2023, Allianz announced that Thorsten Winkelmann and four of his team members, including Robert Hofmann, Marcus Morris-Eyton, Darina Valkova, and Nicolas Goncalves, will be leaving the firm. Losing five of its 12 members, including its highly regarded team head, is a considerable blow to the Allianz Equity Growth team. The seasoned and long-tenured Winkelmann was the CIO and head of the Allianz Global Growth Equity team. He was a portfolio manager on several of the strategies run by this team and boasted strong experience in the industry, having started his career in 1996. The team underwent several changes since 2017, including a merger with the Allianz Global Equity team in mid-May 2020. But Winkelmann provided continuity to the team, as he had been with the firm since 2001. He had first co-led this team since 2009 before assuming sole responsibility in September 2017 when Matthias Born, who was co-leading with him, left the firm. The other departures are also significant losses. Hofmann was one of the most seasoned and longest-tenured team members. He had been with this team his entire career, starting in 2005, and had been comanaging several strategies. Morris-Eyton and Valkova were less experienced, having joined the team in 2013 and 2015, respectively, but had progressed strongly by assuming more portfolio management responsibilities. Goncalves was one of more recent joiners, coming on board in 2019, and he didn’t have any portfolio management responsibilities yet. Christian Schneider will take over the team leadership and CIO role from Winkelmann. He joined this team following the merger with the Global Equity team in 2020. Since then, he served as deputy CIO of the combined group with the previous Global Equity team members reporting into him and kept managing and overseeing all portfolios of that franchise. The departures also triggered a raft of changes in portfolio management positions. On Allianz Continental European, lead manager Morris-Eyton is replaced by co-lead managers Giovanni Trombello and Julian Bishop, while deputy manager Valkova is succeeded by Andreas Hildebrand. Meanwhile, lead manager Hildebrand is accompanied by comanager Trombello on Allianz Euroland Equity Growth, and Valkova is not replaced in her capacity as deputy manager. Allianz Europe Equity Growth loses Winkelmann and Hofmann as co-lead managers and Morris Eyton as deputy-manager; these responsibilities are absorbed by Hildebrand and Trombello, while Schneider and James Ashworth will act as deputy managers. Trombello remains at the helm on Allianz Europe Equity Growth Select, but Winkelmann is succeeded by Hildebrand, who previously was the deputy manager on the strategy, a role that is taken over by Schneider. Finally, Allianz Global Equity Growth will be managed by Schneider and Tobias Kohls, with Hildebrand maintaining his deputy responsibilities here. The appointments include two new team members. Bishop joined Allianz in November 2022 as a co-lead manager for the Allianz Global Equity Dividend strategy. He brings more than 25 years of investment experience, having worked at Tesco Pension Investment, Sarasin and Partners, and Insight Investment. The second new team member is Ashworth, who joined as a senior analyst covering the U.S. financials sector in November 2022. Winkelmann had built a cohesive team that was characterized by a strong investment culture. His departure and that of four of his team members is a massive loss. While the remaining team still consists of several seasoned members, including two experienced joiners, it is unlikely that they will bring the same level of investment acumen right away. Until we speak to them to reassess our opinion, we are placing the ratings on the covered strategies Under Review. Previously, the People Pillar ratings were Above Average for Allianz Continental European, Allianz Euroland Equity Growth, Allianz Europe Equity Growth, and Allianz Europe Equity Growth Select, while this was Average for Allianz Global Equity Growth. The Process Pillar ratings stood at Above Average across all strategies. |
| The departure of CIO and head of Allianz's Global Growth team Thorsten Winkelmann and four of his team members in October 2023 was a significant blow to this franchise. Although the remaining team has provided continuity, good experience, and expertise and the team has since been rebuilt, the People Pillar rating is maintained at Average as the team has yet to prove itself in the current setup. The proven approach has been kept largely unchanged, resulting in the Process Pillar rating remaining at Above Average. Christian Schneider has succeeded Winkelmann. His appointment was a logical and sensible move, as he was already the team’s deputy-CIO following the merger of Winkelmann’s European Equity Growth team and the Global Equity team in 2020. He is a seasoned investor with an extensive global equity merit; among others, he was part of the former Global Equity team since 2000. Following the departures, Allianz swiftly added two well-experienced replacements to the team, Julian Bishop and James Ashworth. Both have considerable portfolio management expertise. The team was further bolstered with the addition of the more-junior Yingying Tao in August 2024 and the experienced Tobias Siemenge in September 2024. We thought highly of Winkelmann and appreciated the strong investment culture in his team, which combined highly experienced portfolio managers with more-junior but talented members. Team members had plenty of latitude to scour the market for investment ideas, but Schneider has added more structure and accountability to members' research responsibilities. They have kept the time-tested approach in place, although it is likely that it will be applied with a slightly greater emphasis on valuation. The team will continue to focus on bottom-up stock selection with a long-term mindset. There is a consistent and strict focus on quality-growth criteria, exemplified by the portfolio’s structural positioning in the far right of the growth column in the Morningstar Style Box. Portfolio construction is not constrained on a sector allocation level, and the approach tends to favor certain sectors, including the industrials and technology sectors, within this strategy. Also, the portfolio is tilted toward mid- and small caps, and the managers are not afraid to invest with conviction despite the smaller market capitalizations. The strategy has an excellent track record going back to October 2009. Although this record is somewhat less relevant following the team changes, we believe it remains informative in setting expectations. Despite underperforming in some of the recent calendar years, the strategy has significantly outperformed the Europe large-cap growth equity Morningstar Category average and the Morningstar DM Europe Growth TME category benchmark. However, risks are generally elevated, and the performance profile can strongly deviate from the broader market because of the portfolio’s distinctive characteristics. |
Rebuilding the team.To find out how Morningstar rates a fund click here.
| Morningstar Pillars | |
| People | Average |
| Parent | Average |
| Process | Above Average |
Morningstar Medalist RatingMorningstar assigns the Medalist Rating to funds that are qualitatively and quantitatively assessed through manager research and algorithmic processes. The assessment turns on three key “pillars” – People, Process, and Parent – that yield an estimate of how well a fund will perform before fees but after adjusting for risk.
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