Pimco takes $200bn hit in outflows
Pimco’s assets under management fell 16 per cent in the fourth quarter of 2014, as the company dealt with the fallout of the departure of its founder Bill Gross.
The company was managing $1.27tn of client money at the end of December, compared to $1.47tn at the end of September.
The drop of $200bn is more than the entire assets at Janus Capital, the fund management group where Mr Gross now runs a small bond fund.
Customer outflows, which peaked in the days after Mr Gross’s departure on September 26, picked up speed again in December, even as Pimco worked to reassure clients that it was moving on from a year of management turmoil, under the leadership of new chief investment officer Dan Ivascyn.
The company is also hoping to capitalise on a strong start to 2015 for its flagship fund, the $143bn Total Return Bond fund, which used to be run by Mr Gross and which has halved in size since its peak in 2013.
The fund had been betting against the euro and proved to be a winner from this week’s move by the Swiss central bank, which decided on Thursday to let the franc rise against the European single currency. As a result, Total Return is beating 97 out of 100 funds in its category over the past month, according to Morningstar.
While retail investors and financial advisers were quick to react to Mr Gross’s exit, large institutional investors such as pension funds take longer to make allocation decisions. Rival firms such as TCW, BlackRock and Goldman Sachs have already snatched significant business from Pimco, and believe that money will continue to move throughout this year.
As well as customer defections, the quarter-on-quarter change in assets under management also reflects currency effects and performance gains. The year-end total of $1.27tn excludes around $400bn managed on behalf of Allianz, the German insurer which owns Pimco.
A Pimco spokesman declined to comment.