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PIMCO has really lost a great deal of luster over the past few years....and AUM. There are too many good landing places for a bond investor these days.
Consistent with Ted's comment is the curious ordering of statements - first that there are leadership changes (including "new responsibilities" for El-Erian), then repeating that PIMCO has reorganized its structure. Then a new paragraph saying that El-Erian has resigned.
Sounds a bit like Bill Miller's semi-departure at Legg Mason (CNN):
Miller will remain the chairman of Legg Mason, but the firm announced ... he will no longer manage the Legg Mason Capital Management Value Trust and will no longer be the firm's chief investment officer.
"Portfolio management will be strengthened by the appointment of the Managing Directors Andrew Balls and Daniel Ivascyn as Deputy Chief Investment Officers."
Relative to some Pimco portfolios, I am more concerned with Daniel Ivascyn being stretched into too many other duties away from portfolio management.
PIMIX is almost 7 years old and the life of fund return = 10.35%.
Don't know anyone who could complain about the return. Yes, the fund has a high turnover and they play with all of the tools to achieve the returns. One can either go play with something like AGG in the bond sector or have a more serious bond sector investment as with this fund.
Reply to @Ted: Ted...it will be interesting to see what information leaks out over the next few days.
Last Friday, you initiated a thread titled "Burned By Bonds -- Should You Leave ?". I posted a comment saying "It doesn't look as though the public is buying the new normal that Gross and El-Erian are peddling... Dan Ivascyn hopefully is re-negotiating his contract."
Reply to @Mona: El-Erian previously held a position at the IMF. I would be surprised if he did not wind up in a political position somewhere in the world.
Reply to @Mona: From what I have read and heard, he is a friend of Bill and Hill. He could end up in a variety of places like the IMF where he once was, UN, or any number of think tanks.
PIMCO has lived high on the hog for years as the bull market for bonds thrived. They dabbled here and there in equities, but it is obvious the focus would stay on bonds and the derivative-driven secret formula they used to boost bond fund returns. My take is that last year's losses confirmed that someone at the top had to go. It obviously was not going to be Mr. Gross, the face of PIMCO for almost two decades. But even with this so-called restructuring, PIMCO must truly re-invent itself for what will most likely be troubled times ahead for fixed-income management. It seems unlikely that Mr. Ivascyn will replace Mr. Gross as the PIMCO guru and news hawker. So has anything really changed? Stay tuned for PIMCO 3.0.
Reply to @BobC: I don't think Gross is as good at TV as El-Erian is, although Gross seems like he's playing poker while on CNBC. As much as I do agree with Gross at times, the whole thing of Gross tweeting every five seconds is becoming a little much (like his "I'm ready to go another 40 years!" yesterday - really, Bill? How old are you at this point?).
Their venture into equities has not gone as well as I think they'd hoped, although I do think their attempts to pull various "known" managers from other companies was a good one in theory. However, the most successful fund last year of the bunch was Pimco L/S, a small hedge fund converted into a mutual fund. The former Mutual Discovery managers haven't done well (not that anyone expected home runs from that fund) and didn't one of the former Thornberg Income Builder managers leave?
I apparently have a more positive view of El-Erian than a number of people. The fund was admittedly disappointing, but I still think that they put his name on it largely for marketing - while there was discussion that he would take a larger role, I just think he was never that involved with the fund aside from maybe in a broad manner. I do see El-Erian's rather sudden departure either as he's getting out while the getting is good and/or going into politics.
El-Erian apparently will remain on the board at Allianz. I agree with BobC - I think Pimco likely is facing the need to reinvent itself and it probably doesn't have the time it would like to do so. Tony Crescenzi is someone at Pimco that I think could be put towards the front - great on CNBC, lengthy career.
As I'm writing this, Bloomberg discussing El-Erian possibly taking a role at the Fed, given the lack of "fed officials with significant market experience." Some people seem particularly negative on El-Erian, but if he does manage to find a role at the Fed, think of the possibilities for Pimco?
"Before he got into the money-management business, El-Erian was a staff economist at the International Monetary Fund. Over the course of a 15-year career he ended up working closely with the Fund's No. 2 bureaucrat in the 1990s: Stanley Fischer, who was just nominated to be Federal Reserve Board vice chairman. (This is why El-Erian gave the lunch address at a recent conference the Fund held in Fischer's honor.) It's possible that Fischer is pushing to get his trusted deputy into the last open slot at the Fed, just as Janet Yellen, who will become Fed chairman next month, pushed the White House to nominate Fischer." (reference link to an amusingly titled article: "http://www.bloomberg.com/news/2014-01-21/el-erian-s-next-act-and-the-ascent-of-pimco-s-balls.html"
I am in no way bemoaning Mr. Ivascyn's spectacular performance of which I have been a glad beneficiary. What I'm more concerned about is the future - especially as he becomes stretched even thinner at PIMCO. I'm worried he'll have less time to devote towards managing PIMIX as well as he has in the past.
Hey Catch, I miss your weekly updates. I enjoyed them. I hope you are doing well.
Another possibility is that M E-E may simply not be a good manager. Kicking managerial people who don't work out upstairs to a specialist, advisory role is a very common personnel move in situations like that.
Comments
Regards,
Ted
Regards,
Ted
https://www.allianz.com/v_1390337998000/media/investor_relations/en/announcements/140121_irrelease.pdf
Consistent with Ted's comment is the curious ordering of statements - first that there are leadership changes (including "new responsibilities" for El-Erian), then repeating that PIMCO has reorganized its structure. Then a new paragraph saying that El-Erian has resigned.
Sounds a bit like Bill Miller's semi-departure at Legg Mason (CNN):
"Portfolio management will be strengthened by the appointment of the Managing Directors Andrew Balls and Daniel Ivascyn as Deputy Chief Investment Officers."
Relative to some Pimco portfolios, I am more concerned with Daniel Ivascyn being stretched into too many other duties away from portfolio management.
Regards,
Ted
Mike_E
PIMIX is almost 7 years old and the life of fund return = 10.35%.
Don't know anyone who could complain about the return.
Yes, the fund has a high turnover and they play with all of the tools to achieve the returns. One can either go play with something like AGG in the bond sector or have a more serious bond sector investment as with this fund.
Fidelity view of this fund
Regards,
Ted
http://blogs.marketwatch.com/thetell/2014/01/21/pimcos-el-erian-bows-out-after-big-2013-outflows/tab/print/
Last Friday, you initiated a thread titled "Burned By Bonds -- Should You Leave ?". I posted a comment saying "It doesn't look as though the public is buying the new normal that Gross and El-Erian are peddling... Dan Ivascyn hopefully is re-negotiating his contract."
I think I'll start a newsletter.
I did not realize that Egypt gave political appointments.
Or, is it that all they give?
Mona
Regards,
Ted
http://www.morningstar.com/Cover/videoCenter.aspx?id=631412
Their venture into equities has not gone as well as I think they'd hoped, although I do think their attempts to pull various "known" managers from other companies was a good one in theory. However, the most successful fund last year of the bunch was Pimco L/S, a small hedge fund converted into a mutual fund. The former Mutual Discovery managers haven't done well (not that anyone expected home runs from that fund) and didn't one of the former Thornberg Income Builder managers leave?
I apparently have a more positive view of El-Erian than a number of people. The fund was admittedly disappointing, but I still think that they put his name on it largely for marketing - while there was discussion that he would take a larger role, I just think he was never that involved with the fund aside from maybe in a broad manner. I do see El-Erian's rather sudden departure either as he's getting out while the getting is good and/or going into politics.
El-Erian apparently will remain on the board at Allianz. I agree with BobC - I think Pimco likely is facing the need to reinvent itself and it probably doesn't have the time it would like to do so. Tony Crescenzi is someone at Pimco that I think could be put towards the front - great on CNBC, lengthy career.
As I'm writing this, Bloomberg discussing El-Erian possibly taking a role at the Fed, given the lack of "fed officials with significant market experience." Some people seem particularly negative on El-Erian, but if he does manage to find a role at the Fed, think of the possibilities for Pimco?
"Before he got into the money-management business, El-Erian was a staff economist at the International Monetary Fund. Over the course of a 15-year career he ended up working closely with the Fund's No. 2 bureaucrat in the 1990s: Stanley Fischer, who was just nominated to be Federal Reserve Board vice chairman. (This is why El-Erian gave the lunch address at a recent conference the Fund held in Fischer's honor.) It's possible that Fischer is pushing to get his trusted deputy into the last open slot at the Fed, just as Janet Yellen, who will become Fed chairman next month, pushed the White House to nominate Fischer." (reference link to an amusingly titled article: "http://www.bloomberg.com/news/2014-01-21/el-erian-s-next-act-and-the-ascent-of-pimco-s-balls.html"
Regards,
Ted
http://www.marketwatch.com/story/pimco-and-bill-gross-will-weather-el-erians-exit-2014-01-21/print?guid=BA507A5E-82D7-11E3-A813-00212803FAD6
I am in no way bemoaning Mr. Ivascyn's spectacular performance of which I have been a glad beneficiary. What I'm more concerned about is the future - especially as he becomes stretched even thinner at PIMCO. I'm worried he'll have less time to devote towards managing PIMIX as well as he has in the past.
Hey Catch, I miss your weekly updates. I enjoyed them. I hope you are doing well.
Mike_E