By Kirsten Grind
Pacific Investment Management Co. Chief Executive Douglas Hodge
says there is an "overwhelming" sense of relief and excitement at
the giant asset manager, following the abrupt departure on Friday
of bond investor Bill Gross.
In his first interview since the news was announced, Mr. Hodge
on Saturday said Pimco executives gave a standing ovation to Daniel
Ivascyn, Pimco's new group chief investment officer, following his
appointment on Friday afternoon.
"There's a sense of optimism and enthusiasm," Mr. Hodge
said.
Mr. Hodge and other Pimco executives spoke with The Wall Street
Journal by telephone.
Mr. Gross, 70, resigned from Pimco, the Newport Beach,
Calif.-based company he co-founded in 1971, to join Janus Capital
Group Inc. to manage a small unconstrained bond fund.
Pimco executives were planning to fire Mr. Gross before he
resigned, according to people familiar with the matter. Mr. Hodge
said Mr. Gross "tendered a written resignation" that he sent to him
on Friday morning, but Mr. Hodge declined to comment further.
A succession plan had always been in place at Pimco, Mr. Hodge
said, but the firm began retooling that plan after the March
departure of former CEO Mohamed El-Erian. Mr. Hodge has been in his
position since Mr. El-Erian left. Before then, he had been chief
operating officer.
Pimco, a unit of German insurer Allianz SE, has about $2
trillion in assets under management.
Meanwhile, in his first interview since his appointment as group
CIO, managing five other chief investment officers, Mr. Ivascyn
signaled that the firm would be managed differently than under Mr.
Gross. In the past three decades, Mr. Gross had been synonymous
with Pimco, sending out long investor letters and often appearing
on financial news shows.
Mr. Ivascyn said there will be a much greater focus on a team
approach to management. Indeed, the $222 billion Pimco Total Return
fund that Mr. Gross managed will now be run by three chief
investment officers: Mark Kiesel, Scott Mather and Mihir Worah.
On Pimco's website, a strip of photos on the home page that once
prominently featured Mr. Gross has been replaced with those of
other executives, though not of Mr. Ivascyn. "In terms of media,
that hasn't been an area of focus for me." Rather, Mr. Ivascyn said
his top priority will be on generating stellar returns.
In addition to his duties overseeing the other chief investment
officers, Mr. Ivascyn will continue managing the $38 billion Pimco
Income fund and will join the unconstrained bond fund group at the
firm, he said.
The 45-year-old Mr. Ivascyn was named Morningstar Inc.'s
bond-fund manager of the year in 2013.
Meantime, Mr. El-Erian, who now serves as chief economic adviser
to Allianz, said in a statement on the German company's website:
"Dan is a brilliant investor, inspiring leader, superb manager and
one of the most considerate and decent people I know. He is a great
Group CIO for Pimco."
Investors might not see any difference in investment strategy at
the Pimco Total Return fund, at least right away. Mr. Mather, also
speaking for the first time in his new role, said the fund will
keep its general strategy in place.
Write to Kirsten Grind at kirsten.grind@wsj.com
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