PIMCO is moving away from a founder-led model and the $2 trillion asset manager’s flagship fund, formerly run by co-founder Bill Gross “does not define Pimco”, CEO Doug Hodge said on Sunday.
“Over the last five years, we have expanded into far more parts of the fixed income market and into other asset classes and other geographies, so the Pimco Total Return Fund does not define Pimco,” Hodge said. “It’s an important flagship product of this firm but it is not our only strategy.”
Hodge and Dan Ivascyn, who takes over for Gross at the Newport Beach, California-based firm as group chief investment officer, told Reuters in an interview that they have been speaking to clients all weekend about the new leadership. Pimco is a unit of Munich-based Allianz.
“With regard to our clients and the potential for outflows, again, when there is any significant change, we are out communicating with our clients and we are talking with them and we are explaining the changes that are going on,” Hodge said.
“The outflows that have happened – and that may happen – we stand by our clients. We are managing assets and are confident that the vast majority of clients will stand with us.”
File photo shows William H Gross of Pimco as he participates in a conference on the future of housing finance at the Treasury Department in Washington, DC on August 17, 2010. Pimco is moving away from a founder-led model and the $2 trillion asset manager’s flagship fund, formerly run by co-founder Bill Gross ‘does not define Pimco’, CEO Doug Hodge said on Sunday – AFP
On Friday, Gross shocked the investment world by leaving his post as chief investment officer to join mutual fund management firm Janus Capital. The move followed record outflows from Pimco’s flagship portfolio and clashes with other top executives.
Bill Gross was not available for comment. Sue Gross, Bill’s wife, said on Sunday she and Bill were “doing good”.
Gross’s exit, eight months after his top deputy Mohamed El-Erian quit amid acrimony, may quicken speculation in the bond market about leadership uncertainties and accelerating outflow at the world’s largest bond firm.
Since the start of the year, investors have pulled $25 billion from the Pimco Total Return Fund, the world’s largest bond fund, and $6 billion from the Pimco Unconstrained Bond Fund, according to Morningstar data as of the end of August.
Both were personally supervised by Gross, 70, who also oversaw the Pimco Total Return ETF, the object of the SEC probe. – Reuters