Gemini Solutions

AMC L0 | Session 5
Asset Management Companies
You need Profit, They know Profit!
 “
The first rule of an investment is don't lose
money. And the second rule of an
investment is don't forget the first rule.

— Warren Buffett
 • Introduction​
• Forms and Functions
OVERVIEW • ​How do AMCs make Money?
• PIMCO as an AMC
 Introduction to AMCs

A M C
Asset Management Company
 Forms and Functions of AMC

An Asset Management Company can have several forms and corresponding functions:
- Feeling adventurous? AMCs can invest in high-risk, high-return instruments on your behalf (Hedge Funds)
- Making low risk, long term investments on behalf of investors with the aim to maximize it (Mutual Funds)
- Try to emulate market index by following an index like NIFTY50, SENSEX, etc. Also, a low-risk, long-term
investment. (Index Funds)
- A stock index, in simple words, is a group of shares

- Common Objective: Maximize profit, minimize losses

 How do AMCs make Money?

Let’s understand this with the help of an example

Investor PIMCO

The investor invests Rs. 10 crores for investment to the AMC

 How do AMCs make Money?

Let’s understand this with the help of an example

Mutual Funds

Invests
Hedge Funds

PIMCO Index Funds

The AMC invests that amount in different funds as per the requirements of the investor and earns
profit/loss depending on the performance of those funds.
 How do AMCs make Money?

Let’s understand this with the help of an example

PIMCO Investor

The AMC charges a commission on the AUM (Capital provided by Investor +/- gain/loss)
and gives the rest to the investor!
 How do AMCs make Money?

Let’s understand this with the help of some numbers as an example:

Initial Invested Value  Returns for Investor

Rs. 10 crores Rs. 14.70 crores

PIMCO Investor PIMCO When Current Value Investor

of investor's portfolio
is Rs. 15 crores

• Now PIMCO builds a portfolio for the investor, worth Rs. 10 Crores, according to the amount of return the
investor seeks and the risk appetite they have. 
• Say PIMCO decides to charge a 2% fee for handling the investor's money, this means that PIMCO owns Rs. 20
lakhs of the investor's Rs. 10 crores. 
• Now, in some time, if the value of the portfolio increases to say, Rs. 15 Crores, PIMCO will still own 2% of the
current value of the portfolio, which is Rs. 30 lakhs.    
PIMCO 
Asset Management Case
 PIMCO at a Glance
• There are two components of the financial system: The producers and the consumers of money
• The producers have access to a lot of money – they produce money as a result of activities they perform or product they sell -> they
add value to the system, in exchange of that value they are compensated with money.
• Different from the fundamental entity that introduces money in the system of a country.
What is this entity? (not govt) - Reserve Bank / Fed
• The consumers are the entities who need money for a bunch of activities - for setting up businesses, creating products, buying
essentials, paying rents, lending to other people, etc.
 Business Model of PIMCO

In between those producers and consumers, there

are managers of money.
Typically – they are managing the money of others
– in exchange of fee for their expertise in
investment management.

PIMCO is an asset manager manages money of

other people by investing in assets on their behalf.

Individual or Institutional Investors – tend to

follow the path highlighted in red instead of
investing and managing the investments by
themselves.
 Clients of PIMCO
These are the different types of clients interested in the Fund Management services of PIMCO

Consultants Corporations

Financial Institutions Pension Funds

Non Profits Central Banks

Governments High Wealth Individuals

 PIMCO Products and Solutions
Products and Services offered by PIMCO

Fund Management
• Mutual Funds
• ETFs
• Closed End Funds
• Interval Funds

Access to Global Markets Asset Allocation

Retirement Inflation Protection

ESG Tax Efficiency

Capital Protection Capital Appreciation

 Org Structure & Various Functions at PIMCO

Portfolio Management Client Management Product Strategy Technology Corporate Management

Develop platforms and
Develop, present Builds and Provide legal and
apply complex analytical
and execute trades in maintains client business leadership for compliance expertise,
methods to massive
line with PIMCO’s relationships, works with firm products, plan, organize, lead
data
overall portfolio financial advisors manages information for and monitor
sets, creates internal ap
strategy, research, to understand sales and business activities, Execu
plications, Streamline
develop financial their investment needs. marketing groups, uses te PIMCO’s
trade floor processes,
analytical models, the intellectual capital global strategic, operatio
trade executions
and manages to help build nal, financial and
and transaction
portfolio risk. products according to cultural initiatives,
costs, build tools
the clients' needs Human resources,
and platforms to
marketing, administrativ
help portfolio managers.
Risk Management e services,
Risk Management office services.
Portfolio Management
Technology
Credit Research Software Engineering

Analytics Data Science

 Teams and Functions at PIMCO

FES DevOps Infrastructure Data Engineering  QA App Development

and Data Science
FES teams closely DevOps is responsible Infra team is Testing team App development
work with Analytics for development and responsible for the Data Engineering provides manual team provides
to develop and operations of entire technology team provides data and automated development support
support Analytical some key infrastructure used engineering tools testing support and resources across
models which are run Risk Management for analytical models and for Technology multiple critical
in Night cycle. and Technology proces processes required teams across the domains .
ses across the firm by Technology firm.
including support on
cloud. RDS

Investment Data
Data Science team is
responsible for CSA
various in-house Operations Tech – Camp,
Analytics Support data modeling Pftrade, PAY, Stock Proxy 
DevOps / Platform Engg. initiatives for more PUMA
FE Infra
efficient and
Portfolio Analytics
TechOps intelligent investing. EMEA Tech
Support
 Key Stakeholders at PIMCO
PIMCO EVP VP / SVP 
Ron Reimer Harsh, Larry Nguyen, Asim Mehta, Paresh
Dhabi, Vikas Kumar, Sanchit Chaudhary,
Anil Kumar Singh, Arpit Chaudhary

Kaveh Heravi Sumeet Sharma, Kapil Singh, Vishnu

Bathina
Kurt Vile Dimitri Betelman,Stuart Crook, 
Ewan Lowe Sajid Shaikh, Matt Momont, Eric Gourley,
Paul Callanan, Mayukh Roy Dutta, Burak

Stanisley Pustygin Lian, Steven, Charles Qing Ling

John Strange Magnus, Travis Buchanan, Rod Batiusta,
Navshad Tavaria, John Jolet, 

Vinod Bhatt Yohann Nahboob, Danny Jordan, Keith

Perez, 
Shaun Doyle Tammy Wong, Nicholas Wells, Bradley
Futch
PIMCO - AUM and Growth
PIMCO - AUM and Growth
Thank You!
WE DO COMMON THINGS
UNCOMMONLY WELL