Damage control at Pimco after Gross, El-Erian clash
By Jennifer Ablan and Luciana Lopez
NEW YORK (Reuters) - In mid-February, a group of current and former Pimco employees were invited to a private farewell party for Mohamed El-Erian on March 10, to mark his impending departure as chief executive of the world's largest bond fund.
El-Erian soon realized it was not a good idea, according to three sources who had received the invitations and are in contact with him.
On February 24, the Wall Street Journal published a report describing how El-Erian's previously close relationship with Pimco co-founder Bill Gross had soured as the firm's investment performance deteriorated last year. Then Gross told Reuters that his one-time lieutenant was trying to "undermine" him, and that he had "evidence" El-Erian "wrote" the Journal article.
El-Erian postponed the party soon after the March 6 Reuters report, suggesting to colleagues and friends that he did not want things to become awkward for his guests, and out of respect for the tense situation at Pimco, the sources said.
One of these individuals, who subsequently spoke with others on the guest list, said some people had also declined to attend, worried that they could get caught in the bitter clash.
El-Erian, who has a nondisclosure agreement with Pimco (full name Pacific Investment Management Company), declined to comment for this article.
A spokesman for Pimco, which is a unit of German insurer Allianz SE (ALVG.DE: Quote), declined to make Gross available for an interview and declined to comment for this article.
El-Erian officially left the firm on Sunday. But interviews with institutional investors, consultants, and current and former Pimco employees show that the U.S. money manager will likely be dealing with the fallout of his departure long after he is gone from its Newport Beach, California headquarters. Continued...