Pimco staff 'frantic and sad' in wake of Bill Gross sudden exit

Mon Sep 29, 2014 11:03pm EDT
 
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By Jennifer Ablan

NEW YORK, Reuters - Shock and disbelief lingered at Pimco's sleek Newport Beach, California, headquarters on Monday, 72 hours after the investment firm was rocked by the sudden defection of co-founder Bill Gross to far-smaller rival Janus Capital Group.

As executives worked at damage control and to promote the new faces behind investment decision-making at the $2 trillion asset manager, some employees were struggling to cope with the tsunami that swamped their world on Friday.

"I couldn't believe it on Friday, and I still can't believe it now," one employee who was not authorized to speak publicly told Reuters. "We lost Mohamed El-Erian in January and now Bill Gross. It's been confusing, frantic and sad."

The stunning turn of events kept Pimco executives working over the weekend and throughout Monday to soothe clients and staff rattled by the episode, which triggered flashbacks of the departure of El-Erian, once seen as Gross's heir-apparent.

Pimco Chief Executive Officer Doug Hodge and Group Chief Investment Officer Dan Ivascyn convened a series of conference calls with clients and the media to field questions about the firm's future and respond to concerns about how they and corporate parent, German insurer Allianz SE, had handled the affair.

After U.S. markets closed Monday, Hodge and Ivascyn were joined by President Jay Jacobs and global credit chief Mark Kiesel for a global staff meeting and video conference with all employees to boost morale, according to a source close to the situation.

A Pimco spokesperson confirmed that Hodge, Ivascyn, Jacobs and Kiesel spoke to all employees and added "that the mood in the firm is energized and focused."

Among the efforts at containing the fallout was a 90-minute conversation with a Morningstar analyst Eric Jacobson, who has been a supporter of Gross and the firm's flagship Total Return Fund, the world's largest bond fund that Gross steered personally for more than a quarter century.   Continued...

 
Bill Gross, co-founder and co-chief investment officer of Pacific Investment Management Company (PIMCO), speaks at the Morningstar Investment Conference in Chicago, Illinois, in this file photo taken June 19, 2014.  REUTERS/Jim Young/Files