Market Overview

What PIMCO Looks Like After Bill Gross

What PIMCO Looks Like After Bill Gross

Sunday nights aren't usually associated with major financial news, which makes it all the more curious why Pacific Investment Management Company (PIMCO) released a major update a few hours before midnight on September 28.

Then again, PIMCO didn't exactly have a typical week, either.

Last Friday, founder Bill Gross announced he was leaving the firm for Janus Capital Group Inc (NYSE: JNS). 

Shares of Janus rose 43 percent.

PIMCO as a whole isn't publicly traded, but investors sold many of its funds en masse.

PIMCO Corporate and Income Opp Fund (NYSE: PTY), PIMCO Global Stockplus and Income Fund (NYSE: PGP) and Pimco HIgh Income Fund (NYSE: PHK) each shed more than 5 percent in value during Friday's trading.

The Wall Street Journal reports PIMCO could have lost at least $10 billion from withdrawals over the weekend.

Related Link: Allianz Missed The Boat With Its Pimco Unit, Sanford Bernstein Says

So, how did the firm respond? With a Q&A from Chief Investment Officers Scott Mather, Mark Kiesel and Mihir Worah, who now manage Gross's $200 billion-plus baby, the PIMCO Total Return Fund.

Highlights from the Q&A session:

  • "I am proud to say that we all have strong long-term records of generating performance for clients." -Scott Mather
  • "As with every other generalist portfolio manager at PIMCO, Bill Gross relied on us – along with the firm’s 240 other portfolio managers – for help in generating the trade ideas that have driven the strategy’s strong historical performance." -Mark Kiesel
  • "[W]e believe that a more explicit team approach actually brings a lot of benefits to the strategy." -Mihir Worah
  • "[T]here may be times when we simply can’t come to an agreement. Should that happen, I will make the call." -Scott Mather
  • "Our belief in the New Neutral continues to anchor our views. We believe the Fed has been looking, and will continue to look, to reflate the U.S. economy." -Scott Mather

Naturally, Twitter also reacted:

Disclosure: At the time of this writing, the author had no position in the equities mentioned in this report.


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