Mohamed El-Erian resigns from Pimco, to stay on at Allianz

BOSTON Tue Jan 21, 2014 6:00pm EST

Mohamed A. El-Erian, CEO and co-CIO of PIMCO, takes part in a panel discussion titled ''Global Markets in Uncertain Times'' at the Milken Institute Global Conference in Beverly Hills, California April 29, 2013. REUTERS/Fred Prouser

Mohamed A. El-Erian, CEO and co-CIO of PIMCO, takes part in a panel discussion titled ''Global Markets in Uncertain Times'' at the Milken Institute Global Conference in Beverly Hills, California April 29, 2013.

Credit: Reuters/Fred Prouser

BOSTON (Reuters) - Mohamed El-Erian, long seen as the heir apparent at the world's biggest bond fund manager, is stepping down from his roles at Pacific Investment Management Company.

Pimco's parent, German insurer Allianz, (ALVG.DE) said on Tuesday that El-Erian would resign as the asset manager's chief executive officer and co-chief investment officer.

The company did not give a reason for El-Erian's departure, but the bond market was hit hard last year as investors moved money to stocks from bonds.

El-Erian will stay on to consult at the German insurer, but the news that he would leave Pimco took the investment community by surprise.

El-Erian, 55, is well known due to his frequent appearances on cable television and at investment conferences.

He sent out an email announcing his departure that failed to shed more light on the decision.

Bill Gross - the co-chief investment officer and co-founder of Pimco and manager for the $237 billion PIMCO Total Return Fund - tweeted "PIMCO's fully engaged. Batteries 110 percent charged. I'm ready to go for another 40 years!"

Two years ago, Gross, now 69, told the New York Times, "Mohamed is my heir apparent."

Allianz named Douglas Hodge, managing director and currently chief operating officer of the firm, as its next chief executive. The firm also named managing directors Andrew Balls and Daniel Ivascyn as deputy chief investment officers.

The news comes after Pimco had a record $41.1 billion in outflows last year, according to the investment research firm Morningstar. Pimco till managed $1.97 trillion in assets as of September 30, 2013 according to its website.

"Mohamed El-Erian helped set the strategic direction of the company and it certainly makes a difference when someone who is used to making such headlines leaves a company," said Jeff Tjornehoj, senior research analyst at Lipper. "We don't know what kind of impact it will have yet but it will have an impact."

(Reporting by Svea Herbst-Bayliss, Jennifer Ablan, Sam Forgione and Edward Taylor; Editing by Mike Collett-White and Jonathan Oatis)

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Comments (2)
SLOjohnny wrote:
Bond traders took a beating as stock prices soared in 2013. Bonds are only an investment for those who want to hold until maturity. This type of bond market is for large institutional investors. Small investors will invest through index funds. Either way, Pimco revenues will be suppressed and growth prospects will remain low.

Jan 21, 2014 6:41pm EST  --  Report as abuse
WeAreLosingIt wrote:
Gross throws El-Arian under El-Bus.

Jan 22, 2014 2:20am EST  --  Report as abuse
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