Pimco’s new growth plans have nothing to do with bonds
Bill Gross’s long-running and once highly-celebrated Pimco Total Return Fund has suffered net redemptions for 15 consecutive months, due mainly to a poor performing bond market and some turmoil within the firm. The messy public divorce between Gross and his right-hand man, former CEO Mohamed El-Erian, being the headliner. Gross also went on television and acted…strangely.
Anyway, today is a new day. Bill Gross’s unflinching optimism has Pimco sticking with its bond strategy while also diversifying into new markets. Currently, Pimco manages roughly $2 trillion, 90% of which is invested in bonds.
The latest diversification push is in alternative investments in Europe, namely real estate. The firm just announced that Joshua Anderson, a managing director and portfolio manager at Pimco’s Newport Beach office, will relocate to London as the head of structured credit investments in Europe. Pimco then poached five real estate specialists from big name competitors like Goldman Sachs and Blackstone.
Within the last 18 months, Pimco’s alternative investment strategies have grown from around $17 billion to $25 billion, according to the Wall Street Journal. The real estate team in Europe is up to 21 people itself. Not stopping there, Pimco is also planning a deeper dive into equities – something that it had tried before, on several occasions, but failed to make any real headway.
The firm hired Schroeder’s exec Virginie Maisonneuve to run the unit earlier this year, and is now filling out the ranks below. Maisonneuve said previously she’d look to hire as many as 16 new equities staffers, split between senior portfolio managers, traders and analysts. At least four hires have already been made.
Pimco appears fairly desperate to diversify their offerings, with new CEO Douglas Hodge telling Financial News that he wants to “extend our reach to anywhere, in any market.” Now is not a bad time to knock on Pimco’s door if you’re looking.
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Quote of the Day: "The long and short of Mathew Martoma's trading is that he traded his liberty, his name and his time with his family for what in the end is nothing." – Manhattan District Attorney Preet Bharara on the Martoma sentencing
