Allianz could face hundreds of billions in outflows on Gross exit -Morningstar

NEW YORK (Reuters) - Bill Gross's departure from investment firm Pimco could lead investors to pull hundreds of billions of dollars in assets from its parent company and invest them with Janus Capital Group, the rival firm that Gross is joining, a Morningstar analyst said Friday.

"We expect to lower our fair value estimate, as it is likely that tens of billions, if not hundreds of billions in AUM, will follow Gross to Janus from Allianz," Morningstar analyst Vincent Lui said in a report on the Morningstar website Friday.

Morningstar, a fund research firm, said it was placing Allianz SE, the German insurer that owns Pimco, under review while Morningstar assesses the impact of Gross's departure.

Lui cited DoubleLine chief executive Jeffrey Gundlach's 2009 departure from asset manager TCW as a "possible model" for flows behavior, noting Gundlach's firm now has over $50 billion(30.78 billion British pound) in assets.

Gross, Pimco's chief investment officer whose $222 billion Pimco Total Return Fund is the world's largest bond fund, quit Pimco for Janus on Friday, the day before he was expected to be fired from the huge investment firm he co-founded more than 40 years ago.

Investors have already pulled almost $70 billion from Gross's flagship mutual fund from May 2013 through August 2014, according to Morningstar data, reducing the fund's assets from a peak of $292.9 billion in April 2013.

Analysts have said cash outflows began last year due to weak returns. Gross's public falling-out with former heir-apparent Mohamed El-Erian, who shared the co-chief investment officer title, exacerbated investors' unease.

Lui of Morningstar was not immediately available for comment.

(Reporting by Sam Forgione; Editing by James Dalgleish)