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 Mark Kiesel, Virginie Maisonneuve, Scott Mather and Mihir Worah,
currently managing directors at Pacific Investment Management Co,
will become deputy chief investment officers, Pimco said in a
statement.
The four will join Dan Ivascyn and Andrew Balls, who were appointed
last week after Mohamed El-Erian, who is the chief executive officer
and who shares the chief investment officer role with Gross,
abruptly announced plans to resign from Pimco, the world's largest
bond fund manager.
The ongoing shakeup comes as many investors are turning their backs
on the kind of bond investments Pimco is famous for offering. In
fact, last April Gross went so far as to declare the three-decade
bull run for bonds to be over.
Reflecting that, several of the new appointments have expertise
outside of the fixed-income sector, which has long been Pimco's
bread-and-butter business. Maisonneuve, for instance, recently
joined Pimco in January to succeed Neel Kashkari as the Newport
Beach, California-based firm's global head of equities.
"Our six deputy CIOs demonstrate the strength, depth and breadth of
investment talent at Pimco," Gross, 69, said in a statement.
"Individually and as a team they have delivered for clients
consistently, and they will now help lead Pimco's investing
excellence into the future."
El-Erian, who had been widely seen as the heir apparent to Gross,
will leave the firm in mid-March. Gross, who shared the title of
co-chief investment officer, will become the sole CIO. El-Erian will
remain a consultant at Allianz <ALVG.DE>, the German insurer that
owns Pimco.
Allianz granted Pimco in 2011 full control of its global
distribution of its products — a move that had given the world's
largest bond fund more independence as it expanded into new
businesses.
The reorganization had given Pimco more independence from its
corporate parent as it expanded into equities and other asset
classes as well as products — a move that El-Erian then told Reuters
was "another step in Pimco's ongoing evolution as the complete
provider of global investment solutions for our clients around the
world."
Pacific Investment Management Co had $1.92 trillion in assets as of
December 31, according to the firm's website.
BOND KING's SUCCESSOR STILL SEEN IN DOUBT
Even though Allianz's PIMCO quickly appointed Douglas Hodge as chief
executive officer last week plus six new deputy CIOs to replace El-Erian,
analysts and investors agree that none are real contenders for
Gross' job right now.
A CEO selection committee comprised of senior Pimco managing
directors appointed Hodge as chief executive officer. The
appointment of deputy CIOs was likewise made by Pimco, according to
a Pimco spokesperson.
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"I think that it is very clearly an effort on Bill Gross and Pimco's
part to reassure clients, in particular, that not only have they
worked on succession planning in the past but that there are real
people identified in that process to take over if necessary," said
Morningstar senior research analyst Eric Jacobson.
He added: "I just don't see any single heir apparent at this point.
I do think it remains an open question whether any of these folks
are in a position to truly challenge Bill Gross's investment ideas
and macro thinking."
The management overhaul comes against the backdrop of a rough 2013:
Customers withdrew $41.1 billion from Pimco's flagship Total Return
Fund last year, a record amount for the $2 trillion manager,
according to investment research firm Morningstar.
Pimco also said that managing directors Charles Lahr and Marc
Seidner will leave, while Sudi Mariappa will re-join as a managing
director and generalist portfolio manager.
Mariappa will return to Pimco from GLG where he has served since
2012 co-managing that firm's absolute return fixed income offering.
He was previously at Pimco from 2000-2011 as a managing director,
portfolio manager and senior adviser.
Interviewed on CNBC, Gross said about El-Erian: "We're disappointed
that he won't be with Pimco, that he didn't continue with the
successor role for me as chief investment officer — but that is the
way it is and we're going to move forward."
This past weekend, Pimco replaced the ubiquitous photo of Gross and
El-Erian on its Twitter stream, which has attracted over 164,000
followers, with the firm's logo.
(Reporting by Jennifer Ablan; editing by
Rosalind Russell and Lisa Shumaker)
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