By Kirsten Grind
Pacific Investment Management Co. is trying to replace two
independent trustees overseeing its massive Pimco Total Return fund
at a time when the fund is seeing extensive outflows, according to
people familiar with the matter.
Fund directors of the Newport Beach, Calif.-based company have
retained a search firm to replace longtime independent trustees
William Popejoy and Vern Curtis, who recently left the firm for
undisclosed reasons, according to one of these people.
The two are listed as overseeing 163 portfolios at Pimco,
including Total Return, according to regulatory filings.
Directors hope to replace Messrs. Popejoy and Curtis in the next
several months. An attorney for Mr. Popejoy didn't immediately
return a call for comment. Mr. Curtis didn't immediately return a
call for comment.
Their departures leave three independent trustees remaining on
the seven-person board: E. Philip Cannon, formerly the president of
the Houston Zoo; J. Michael Hagan, a private investor; and Ronald
Parker, director of Roseburg Forest Products Co., according to
regulatory filings. Pimco Chief Executive Douglas Hodge and Pimco
Managing Director Brent Harris serve as "interested" directors.
Though little talked about, trustees play a crucial role in the
oversight of mutual funds. They review performance, help settle
conflicts between a fund and its adviser, and value securities,
among other tasks. Their role is particularly important when a fund
is under stress, say experts. Investors pulled $3.94 billion from
Pimco Total Return in August, its 16th straight month of outflows,
according to fund research firm Morningstar Inc. Clients have
pulled a net more than $60 billion from the fund since May
2013.
The fund, run by Chief Investment Officer Bill Gross, saw its
assets under management slip from $223 billion to $221 billion
during the month. The Total Return fund remains the largest bond
fund in the world.
Mr. Popejoy and Mr. Curtis, both private investors, are Pimco's
longest-running independent trustees, having served at the company
since 1995, according to regulatory filings.
Pimco's independent trustees are paid an annual retainer of
$145,000, plus additional fees for attending in-person and phone
meetings, according to the filings.
Mr. Popejoy had been critical of Mr. Gross's salary, estimated
at $200 million annually. Mr. Popejoy told the Los Angeles Times
earlier this year that "you could hire 2,000 schoolteachers for
that money." The salary was reported in a Wall Street Journal
article in February.
Write to Kirsten Grind at kirsten.grind@wsj.com
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