Sept. 29 (Bloomberg) — Pacific Investment Management Co.'s Chief Executive Officer Douglas Hodge said the firm is expecting and is ready for client redemptions following the departure of co-founder Bill Gross.
In a conference call with analysts where he was joined by top executives at Pimco parent Allianz SE, Hodge said management changes have triggered reviews with some clients. Hodge said it is too early to estimate redemptions at the Newport Beach, California based firm.
Investors including the The California Public Employees' Retirement System, the largest U.S. pension, the Florida State Board of Administration, and New York City's five pension plans said they are monitoring the situation after Gross's surprise Sept. 26 announcement that he was joining Janus Capital Group Inc. Sanford Bernstein said in a report that day that Pimco could see withdrawals of 10 percent to 30 percent.
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Calpers, which has about 1.5 percent, or $1 billion of its fixed-income assets in a Pimco international bond fund, doesn't have plans to change its investments with Pimco. It will monitor developments and conduct thorough analysis.
"Calpers has respect for both Bill Gross and Pimco investment professionals," the pension system said in an e-mailed statement.
New Team
The new leadership team, including Gross's replacement as chief investment officer Daniel Ivascyn, stressed over the weekend that there will be no major changes in investment strategy.
"It's business as usual," said Scott Mather, one of three newly appointed managers of the $222 billion Pimco Total Return Fund. "We've all been part of the team as members of the investment committee."
Investors had been pulling money from the Total Return Fund as the world's biggest bond fund trailed 63 percent of peers over the past year, on track to underperform a majority of rivals for the third year in four. The fund's assets have shrunk from a peak of $293 billion last year.
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