Pimco CEO says ‘our DNA is fundamentally unchanged’ after Gross

Fri Oct 3, 2014 5:21am EDT
 
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By Jennifer Ablan

(Reuters) - Pimco CEO Doug Hodge played defense on Thursday, reiterating that Bill Gross’s departure has not affected the way the U.S. bond giant functions.

“With Bill’s recent decision to resign, the perception has been that there has been a dramatic shift at Pimco,” Hodge said in a letter to clients on Pimco's website. “However, the reality is that while Pimco has evolved into a globally diversified investment company, our DNA is fundamentally unchanged.”

Pacific Investment Management Co suffered a record $23.5 billion of withdrawals from its flagship Pimco Total Return Fund in September, with its largest daily outflow occurring on the day of Gross's surprise resignation from the firm on Sept. 26.

The Newport Beach, Calif.-based fund manager said the Pimco Total Return Fund, run by Gross for 27 years who made it into the world's largest bond fund, is "well positioned" to meet potential redemptions.

The Pimco Total Return Fund has now experienced 17 straight months of outflows, totaling $92.3 billion. Assets under management have fallen below $200 billion, down from a peak of $292.9 billion in April 2013.

In his letter, Hodge said: “Our investment process, which lies at the heart of the value we offer clients, is ingrained – it is stamped into our DNA. Our culture of rigorous and open debate will continue to animate quarterly forums of our global investment and executive leadership, as well as the daily meetings of the Investment Committee. We remain a team-oriented organization.”

Hodge told Reuters on Sunday that over the last five years, Pimco has expanded into far more parts of the fixed income market and into other asset classes and other geographies. “The Pimco Total Return Fund does not define Pimco. It's an important flagship product of this firm, but it is not our only strategy," he said.

Pimco, he said, has grown to nearly 2,500 investment professionals and staff stationed in 13 global offices, with nearly $2 trillion in assets and a full suite of strategies, including core fixed income, income, real return, enhanced equities, active equities, commodities, active ETFs and alternatives.   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 June 19, 2014 file photo.    REUTERS/Jim Young