MORGAN STANLEY: It's As If $400 Billion Just Left PIMCO

Bill Gross' sudden resignation as CIO of PIMCO was followed by a sharp sell-off in shares of Allianz, the parent of the Newport Beach-based $2 trillion asset manager.

Allianz fell 6% on Friday. Janus Capital, Gross' new employer, saw shares surge 42%.

The big concern is that clients will pull their money out of PIMCO.

"Allianz share price reaction discounts about $400 billion of outflows from PIMCO, we believe," Morgan Stanley's Jon Hocking and Xinmeng Wang wrote on Monday. "This is around 20% of PIMCO's total AUM - our calculation simplistically assumes that the unit's margins do not alter at the reduced level of assets."

According to the Wall Street Journal, PIMCO has already seen $10 billion of withdrawals.

While uncertainty lingers and is certainly discounted into the price, Hocking and Wang believe management "transition plans are well developed." Indeed, Allianz announced PIMCO's new management team only hours after Gross' departure.

The other big question is how much of those outflows will flow into Janus.

"Our US asset management analysts believe that the jump in Janus' share price on Friday implies the capture of only around $20-30bn of AUM," the analysts wrote. "They estimate that while Bill Gross directly managed around $300bn of AUM, he had influence over a total of $500bn (although one could argue for a higher number here). We note that when leading UK income manager Neil Woodford left Invesco Perpetual he subsequently attracted around 12% of the original AUM."

Allianz shares are up 0.7% in Monday trading.