Business model of PIMCO

Customer Segments

PIMCO serves a range of customers, including both individuals, commercial entities and public bodies, that wish to grow and manage their finances through various investment vehicles. These customers include:

• Individuals, including retirement savers and high-net-worth clients;
• Educational institutions, including universities and schools;
• Central banks and government agencies, as well as other public organisations;
• Corporate and commercial entities, providing corporate pension schemes across multiple business sectors;
• Foundations and non-profits, across multiple sectors; and
• Financial intermediaries, including independent financial advisors.

PIMCO is headquartered in the US and principally serves a domestic client base. It, however, maintains a presence across Europe, Asia Pacific, Latin America, and Canada, in order for it to serve international customers directly.

Value Propositions

PIMCO provides value to its customers in the following ways:

• Its broad portfolio of investment funds and products, with the Company providing investment opportunities to its clients across a range of fund types, providing a range of options that suit the requirements and circumstances of a broad spectrum of clients;
• Its technical expertise and market insight, with the Company employing expert, specialist staff across its operating divisions, and with the Company recognised as a thought leader within the investment industry;
• Its accessibility and international reach, with the Company serving clients across the Americas, Europe, and Asia Pacific, through a network of sales and distribution channels; and
• Its track record as a reliable investment manager, with the Company having a positive reputation within industry, attracting a number of clients across the commercial and government sectors.

Channels

PIMCO operates a website at www.pimco.com, through which it provides information on its products, funds, services and corporate activities. The website also provides customers access to the Company’s online service, which allows clients to access a range of services and information, including transaction histories. Much of this functionality is also available through PIMCO’s mobile app, which appears to be available only on iOS platforms.

PIMCO also operates an in-house team of investment professionals and support staff, which provide services directly to clients, either over the phone or in-person, through the Company’s domestic and international network of 13 offices, including in Newport Beach, New York, Toronto, Rio de Janeiro, Munich, London, Amsterdam, Zurich, Milan, Tokyo, Hong Kong, Singapore, and Sydney.

Customer Relationships

PIMCO provides a range of services to its customers on a self-service basis through its online platform, as well as its mobile application. These channels enable customers to perform a number of functions, including accessing account information, tracking fund performance, and receiving electronic statements, without interacting directly with members of the PIMCO team.

PIMCO provides a range of services to its clients directly, through its investment professionals, who work closely with clients in order to provide a service tailored to their individual needs and budgets, The Company aims to establish longstanding relationships with its customers, particularly with its large commercial and institutional clients.

PIMCO also provides a broad range of online resources to its customers via its Insights portal, which includes the PIMCO blog, market commentary, and investment strategy reports. It also provides a number of FAQs, which help clients to effectively utilise the Company’s services.

Clients are able to contact PIMCO directly over the phone or by mail, in order to receive personalised assistance. Alternatively, clients are able to interact directly with PIMCO through its social media accounts, including with Facebook, Twitter, YouTube, and LinkedIn.

Key Activities

PIMCO is a privately-owned hedge fund sponsor. The Company manages client-focused equity and fixed income portfolios, launching and managing equity, fixed income, and balanced mutual funds for its clients.

The firm invests in public equity, fixed income, and alternative markets worldwide, with a focus on dividend-paying and value stocks, corporate bonds, treasury bills, asset-backed securities, municipal securities, and mortgage backed securities.

PIMCO utilises in-house quantitative analysis research in the creation of its portfolio. It has offices across the US and Canada, Latin America, Europe, and Asia Pacific.

Key Partners

PIMCO has a number of partners, with which it works to support and supplement its own product and service offerings. These partners include:

• Joint Venture Partners, comprising a range of companies, principally financial service providers, with which the Company provides joint services through a mutually-owned vehicles;
• External Service Providers, comprising a range of third-party vendors and service providers, to which the Company outsources a range of technology, processing, servicing, and support functions; and
• Strategic and Alliance Partners, comprising companies with which the Company shares resources and tools, and collaborates on various joint projects.

In 2015 PIMCO extended its partnership with Research Affiliates, developing a range of equity strategies as part of an already longstanding equity management relationship. The Company also has a 50-50 joint venture, named Central Park Limited Partnership, with Green REIT, which owns a portfolio of commercial properties.

Key Resources

PIMCO’s key resources are its portfolio of funds and joint-venture companies, its IT infrastructure and mobile platform, its partnerships, its network of offices, its sales and distribution channels, and its personnel.

The Company’s industry expertise, including its specialist investment professionals and research personnel, is of particular importance, with the Company’s ability to identify and manage effective investment portfolios salient to the Company’s successful operations.

Cost Structure

PIMCO incurs costs in relation to the operation of its research activities, the development and maintenance of its IT infrastructure – including its mobile platform, the management of its partnerships, the operation of its sales and market development channels, the payment of professional fees and the contracting of third-party service providers, and the retention of its personnel.

Revenue Streams

PIMCO generates revenue through the provision of various investment management services, and the collection of related fees and commissions.

PIMCO is not a publicly-listed company, and as such is not obliged to publish its financial accounts. Reports, however, suggest that the Company recorded €1.14 billion in annual revenue in 2015, a decrease of 3.1% on the revenue recorded by the Company for 2014. The Company’s revenue is expected to grow in 2016, as a result of the Company broadening its mix of products.