PIMCO

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Pacific Investment Management Company
Type Subsidiary
Industry Financial Services
Founded 1971 (1971)[1]
Founders Bill Gross[1]
Jim Muzzy
Bill Podlich
Headquarters Newport Beach, California, United States
Key people
  • Douglas Hodge, CEO
  • Jay Jacobs, President
  • Dan Ivascyn, Group Chief Investment Officer
Products Investment management
AUM Increase $1.87 trillion (September 2014)[2]
Employees 2000+
Parent Allianz
Website www.pimco.com

Pacific Investment Management Company, LLC (commonly called PIMCO), is a global investment management firm headquartered in Newport Beach, California, with over 2,400 employees working in 13 offices across 12 countries. PIMCO is one of the largest active global fixed income investment managers in the world, with over $1.87 trillion in assets under management as of 30 September 2014.[2] The company runs the largest bond mutual fund in the world, the PIMCO Total Return Fund, and provides portfolio management and asset allocation solutions for millions of investors worldwide. PIMCO offers a broad list of investment strategies that encompass the entire risk spectrum and capital structure, including structured credit, alternatives, real assets, equities and currencies. PIMCO also has an ETF business, which had approximately $13.581 billion in assets under management, as of Jan. 21, 2014.[3]

PIMCO oversees investments on behalf of a wide range of clients, including millions of retirement savers, public and private pension plans, educational institutions, central banks and government agencies, foundations and endowments and financial intermediaries among others.

The firm is known to have coined and popularized the phrase "the New Normal" in the aftermath of the subprime mortgage crisis in 2009. More recently, PIMCO introduced the "New Neutral" thesis to characterize a period of lower but stable economic growth, and interest rates to remain low for a longer period of time.

Leadership[edit]

PIMCO's CEO is Douglas Hodge, who succeeded Mohamed El-Erian in 2014,[4] and the firm's President is Jay Jacobs. Dan Ivascyn, Group Chief Investment Officer (CIO),[5] broadly oversees portfolio management and investment strategy. There are also five CIOs: Andrew Balls, CIO Global Fixed Income; Mark Kiesel, CIO Global Credit; Virginie Maisonneuve, CIO Global Equities; Scott Mather, CIO U.S. Core Strategies; and Mihir Worah, CIO Real Return and Asset Allocation.

Firm History[edit]

The firm was founded in 1971,[1] launching with $12 million of assets. Previously, PIMCO had functioned as a unit of Pacific Life Insurance Co., managing separate accounts for that insurer's clients. In 2000, PIMCO was acquired by Allianz SE, a large global financial services company based in Munich, Germany, but the firm continues to operate as an autonomous subsidiary of Allianz.

PIMCO became the center of controversy in 2013 when turmoil between Mohamed El-Erian and William Gross went public amid tepid fund returns. Internal firm documents also leaked concerning employee pay inequality.[6]

On September 26, 2014, it was announced that Bill Gross, co-founder and former chief investment officer, was stepping down to join Janus Capital Group.[1] This was an unexpected event and triggered accelerated redemptions from the firm's largest fund, Pimco Total Return Fund, amounting to US$60 billion in September, October and November 2014, collectively.[5] The fund had been experiencing significant redemptions since it's peak valuation of US$293 billion was reached in April 2013; as of December 2014, the valuation had fallen to US$163 billion.[5] Redemptions appeared to have begun becaise "the Federal Reserve hinted it would unwind stimulus measures".[5] Ranking of the fund among peers was at one time #1, but dropped to #3, based on total holdings, as of December 2014.[5]

References[edit]

  1. ^ a b c d Grind, Kirsten; Calia, Michael (26 September 2014). "Bill Gross Leaves Pimco for Janus". Markets. The Wall Street Journal. (subscription required)
  2. ^ a b "Our Firm". PIMCO. Retrieved 26 October 2014. 
  3. ^ "ETF League Table As Of Jan. 21, 2014". IndexUniverse. 
  4. ^ Leondis, Alexis; Stein, Charles (22 January 2014). "Pimco’s El-Erian Resigns as Hodge Named Chief Executive". Bloomberg News. 
  5. ^ a b c d e Childs, Mary (2 December 2014). "Pimco Total Return Withdrawals Slow to $9.5 Billion". Bloomberg Businessweek (United States). 
  6. ^ Walsh, Ben (19 November 2014). "If Pimco Were A Country, It Would Be The Most Unequal Place On The Planet". Business. The Huffington Post. 

External links[edit]