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Pimco investors withdraw record sum after Gross departure | Pimco investors withdraw record sum after Gross departure |
(about 7 hours later) | |
Bond giant Pimco saw its investors withdraw a record $23.5bn (£14.5bn) in funds after its star manager Bill Gross abruptly left the company last month. | Bond giant Pimco saw its investors withdraw a record $23.5bn (£14.5bn) in funds after its star manager Bill Gross abruptly left the company last month. |
The redemptions were from Pimco's flagship Total Return bond fund, which is the world's largest. | The redemptions were from Pimco's flagship Total Return bond fund, which is the world's largest. |
Overall, the fund lost more than 10% of its assets in September. | Overall, the fund lost more than 10% of its assets in September. |
Pimco said the outflows spiked in the hours after Mr Gross, its co-founder and former chief investment officer, resigned to join rival Janus Capital. | Pimco said the outflows spiked in the hours after Mr Gross, its co-founder and former chief investment officer, resigned to join rival Janus Capital. |
Pimco has been trying to soothe investor concerns and has unveiled three new managers at the Total Return fund. | Pimco has been trying to soothe investor concerns and has unveiled three new managers at the Total Return fund. |
Pimco moved to reassure investors it could cover the fund withdrawals: "The fund is well positioned to meet potential redemptions, and short-term cash management is an area of expertise and strength at Pimco," the company said in a statement. | Pimco moved to reassure investors it could cover the fund withdrawals: "The fund is well positioned to meet potential redemptions, and short-term cash management is an area of expertise and strength at Pimco," the company said in a statement. |
Fund outflows | |
Competitors such as Vanguard and DoubleLine Funds have benefited from the problems at Pimco, which has huge holdings in assets such as US Treasury bonds and mortgage-backed securities. | Competitors such as Vanguard and DoubleLine Funds have benefited from the problems at Pimco, which has huge holdings in assets such as US Treasury bonds and mortgage-backed securities. |
They have attracted hundreds of millions of dollars from Pimco's departing investors, reflecting the sensitivity such funds have to management changes. | They have attracted hundreds of millions of dollars from Pimco's departing investors, reflecting the sensitivity such funds have to management changes. |
Pimco has seen 17 straight months of outflows following a bumpy stretch filled with management shake-ups and increased regulatory scrutiny. | Pimco has seen 17 straight months of outflows following a bumpy stretch filled with management shake-ups and increased regulatory scrutiny. |
It has seen an increase in redemptions since the US central bank announced plans to end its stimulus programme, known as quantitative easing, last year. | It has seen an increase in redemptions since the US central bank announced plans to end its stimulus programme, known as quantitative easing, last year. |
In January, Pimco's co-chief investment officer, Mohamed El-Erian, resigned amid reports of infighting. | In January, Pimco's co-chief investment officer, Mohamed El-Erian, resigned amid reports of infighting. |
Last week it was also revealed one of Pimco's funds is being investigated by the Securities and Exchange Commission to see if it artificially boosted returns. | Last week it was also revealed one of Pimco's funds is being investigated by the Securities and Exchange Commission to see if it artificially boosted returns. |
Pimco is a subsidiary of the German insurer Allianz and has nearly $2tn under management. | Pimco is a subsidiary of the German insurer Allianz and has nearly $2tn under management. |
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