Pimco moving away from Bill Gross model, CEO says

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PIMCO is moving away from a founder-led model and the £1.23 trillion asset manager’s flagship fund, formerly run by co-founder Bill Gross “does not define Pimco,” CEO Doug Hodge said.

“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,” Mr Hodge said. “It’s an important flagship product of this firm but it is not our only strategy.”

Mr Hodge and Dan Ivascyn, who takes over for Mr Gross at the California-based firm as group chief investment officer, said 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,” Mr 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.”

On Friday, Mr 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.”

His exit came eight months after his top deputy Mohamed El-Erian quit amid acrimony.