The departure of Bill Gross from Pacific Investment Management Company (PIMCO) set off a chain of events.
Here’s a brief overview.
The Wall Street Journal reports that investors withdrew nearly US$10 billion from PIMCO on Friday as a result of Gross’s departure.
Janus Capital Group, the firm that Gross joined, saw its stock price jump 43% on Friday. Other asset managers saw their stock prices rise also: BlackRock increased 4.2% while Legg Mason rose 4.3%. Allianz, which owns PIMCO, dropped 6.2%.
A Sanford Bernstein research report predicts that investors will withdraw between 10% and 30% of PIMCO’s assets under management. The company had nearly US$2 trillion in assets under management at the end of June.
Los-Angeles based DoubleLine Capital, a fixed-income investment firm, had between US$400 million and US$500 million of net inflows on Friday, CEO Jeffrey Gundlach told Reuters.
The California Public Employees’ Retirement System (CalPERS) says it “will continue to monitor developments at the firm, and will conduct a thorough analysis of our exposure managed by them. We have no plans at this time to make changes with our PIMCO mandate.” The firm manages an international bond fund for CalPERS, valued at approximately US$1 billion and representing 1.5% of its fixed income program.
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