Allianz Europe Equity Gr Sel W EUR |
Morningstar's Take
|10/11/2023by 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. |
| CIO and head of Allianz’s Global Growth team Thorsten Winkelmann and four of his team members left in October 2023, which is a considerable blow to this franchise. Although the remaining team provides continuity and boasts decent experience and expertise, the recent departures drive a downgrade of the People Pillar rating to Average from Above Average. The proven approach focused on growth investing remains unchanged and still deserves an Above Average Process Pillar rating. Christian Schneider has succeeded Winkelmann. 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. His appointment is therefore a logical and sensible move. He is a seasoned investor with an extensive global equity merit; among others, he was part of the former Global Equity team since 2000. At the instigation of the team, well-experienced portfolio managers Julian Bishop and James Ashworth transferred internally to the team. The firm is in the process of further rebuilding the team, but it is unclear whether it will eventually return to its original strength of 12 members. We held Winkelmann in high regard and appreciated the strong investment culture in his team. Team members had ample latitude to scour the market for investment ideas, but Schneider could possibly add more structure and accountability to members' research responsibilities. Under Winkelmann’s watch, his team applied a time-tested approach and solid investment philosophy, and we don’t expect that to change under Schneider’s lead. The team will continue to focus on bottom-up stock selection with a long-term mindset. There is a consistent and strict focus on growth criteria, exemplified by the portfolio’s structural positioning in the far right of the growth column in the Morningstar Style Box. However, we don’t rule out that Schneider will make small enhancements in the execution of the approach—for example, by a slightly stronger emphasis on quality and valuation in stock research. Indeed, the strict adherence to a company’s quality-growth characteristics doesn't come without valuation-awareness, but this has never been leading criteria in the approach, and this results in above-average valuation metrics. At times, these can reach very high levels, as was the case from the end of 2020 through 2022. These distinctive characteristics, including the strong growth style and relatively richly valued portfolio, can lead to underperformance. This was on full display during 2022, when the strategy got hammered, and this underperformance continued in 2023 as the strategy lagged both the category average and benchmark. The recent underperformance has dented the excellent track record of the strategy since June 2013. Following the recent team instability, these results have become less relevant but remain informative on the performance profile that investors can expect from this approach. |
The departure of team head Thorsten Winkelmann and four team members is a considerable loss.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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