By Chelsey Dulaney
Pacific Investment Management Co. said Friday that Paul
McCulley, who returned to the firm last May to help soothe nervous
investors amid ongoing turbulence, has stepped down from his roles
as chief economist and managing director.
Mr. McCulley, who originally left the bond-fund behemoth in 2010
after serving as a senior executive, returned to Pimco at the
urging of Bill Gross, a close friend and the firm's co-founder.
Mr. Gross shocked the investing world by leaving the firm at the
end of September to start a new mutual fund at Janus Capital Group
Inc. Newport Beach, Calif.-based Pimco has since scrambled to keep
investors following months of internal strife.
Mr. McCulley's last day at Pimco will be Feb. 28. Pimco, a unit
of German insurer Allianz SE, also lost its chief executive,
Mohamed El-Erian, last year after clashes with Mr. Gross.
Mr. McCulley, who has been identified by his long mane of hair,
is perhaps best-known for coining the term "shadow banking" during
the financial crisis, and the "Minsky moment," a term used to
describe a sudden collapse of asset values, which was a phenomenon
examined by the economist Hyman Minsky.
When he returned to Pimco, he took on the newly created role of
chief economist and served on Pimco's investment committee,
traveling the country to meet with big clients. Speaking about Mr.
McCulley's rehiring, Mr. Gross said "We thought that Paul would be
the unifying force, so to speak," of the firm's new structure.
Mr. McCulley's departure comes as investors continue to pull
funds from Pimco.
In January, investors pulled another $11.6 billion from Pimco's
flagship Total Return fund as retirement plans withdrew more
commitments from the world's largest bond mutual fund.
The new outflows were lower than the $19.4 billion lost in
December, according to the company. But January was the 21st
consecutive month of withdrawals from the company's flagship fund,
according to research firm Morningstar Inc. It is now down 54% from
its peak of $293 billion in April 2013.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
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