Bill Gross lags behind rivals for the third year in the last four, and investors have pulled $64 billion from PIMCO Total Return Fund since May 2013.
Allianz dubs Bill Gross as an industry legend
Allianz SE (ADR) (OTCMKTS:AZSEY) (ETR:ALV) called PIMCO’s Chief Investment Officer Bill Gross an industry “legend” despite the fact his main fund trails peers and its assets under management shrank to $225.2 billion last month.
Jay Ralph, the German insurer’s management board member responsible for asset management said in an interview in Munich last week: “We want Bill Gross to work as CIO for as long as he is willing and able”.
Welcome to our latest issue of ValueWalk’s hedge fund update. Below subscribers can find an excerpt in text and the full issue in PDF format. Please send us your feedback! Featuring Point72 Asset Management losing about 10% in January, Millennium Management on a hiring spree, and hedge fund industry's assets under management swell to nearly Read More
Facing bumpy road
This year has been a rough one for Bill Gross and Pacific Investment Management Co., but the dark clouds might finally be lifting. Things started going sour back in January, when the former CEO Mohamed El-Erian resigned abruptly. His departure was followed by reports of clashes between the two men.
Adding to the fire, Gross’s frequent combative and impolitic public statements have led to 14 consecutive months of outflows from PIMCO’s flagship Total Return Fund.
However, The Wall Street Journal earlier reported that PIMCO CEO Douglas Hodge spoke effusively about Bill Gross’ enduring passion for investing back in June in front of hundreds of employees.
In an interview last week, Jay Ralph said, Bill Gross has given no indication that he will step down and is ‘even more invigorated’ as PIMCO begins to improve performance from its biggest fund.
Well positioned team
Allianz SE (ADR) (OTCMKTS:AZSEY) (ETR:ALV) CEO Michael Diekmann and board member Jay Ralph said they see no reason to tighten control of PIMCO’s operations after responding to El-Erian’s departure from PIMCO. In his emailed comments to Bloomberg, Diekmann said: “Bill Gross has always been an outstanding investment manager. We are convinced that he and his team at PIMCO are very well positioned to continue to be successful and we fully support the new management structure”.
As data from Morningstar Inc. reveals, PIMCO’s total assets under management rose by $53 billion to $1.97 trillion through the first half of the year, though the Total Return Fund’s AUM has shrunk to $225.2 billion as of June 30 from $237 billion in December last year.
Meanwhile, Allianz Asset Management, which also includes Allianz Global Investors, is “on track” to achieve a target of a total operating profit of 2.5 billion euros to 2.9 billion euros this year. However, this is below the 3.2 billion euros logged for 2013.
Earlier this month, Lex’s Oliver Ralph suggested that the time has come for Allianz SE (ADR) (OTCMKTS:AZSEY) (ETR:ALV) to let PIMCO strike out on its own.