Pimco launches first closed-end fund in Canada

Fri Mar 21, 2014 1:47pm EDT

The headquarters of investment firm PIMCO is shown in this photo taken in Newport Beach, California January 26, 2012. REUTERS/Lori Shepler

The headquarters of investment firm PIMCO is shown in this photo taken in Newport Beach, California January 26, 2012.

Credit: Reuters/Lori Shepler

(Reuters) - Pacific Investment Management Co on Friday launched the Pimco Global Income Opportunities Fund, one of the largest closed-end funds to list on the Toronto Stock Exchange .TSE, according to a statement by the firm.

The fund, which raised $600 million in its common share offering, will be managed by Alfred Murata and traded under the symbol "PGI.UN." The actively managed portfolio is comprised primarily of fixed-income securities selected from multiple global fixed-income sectors.

This is the first time Pimco is launching a closed-end fund in Canada. Pacific Investment Management Co, which had $1.91 trillion of assets under management as of December 31, is a unit of European financial services company Allianz SE (ALVG.DE).

The news is a refreshing break after a rough week for the firm. Morningstar Inc (MORN.O) analysts downgraded Pacific Investment Management Co's overall stewardship grade by one notch on Tuesday, reflecting a higher degree of uncertainty after the departure of Mohamed El-Erian and other key personnel.

The research firm downgraded Pimco's stewardship grade to a C from B following a comprehensive review of Pimco which included a visit to the Newport Beach, California-based fund company by Morningstar analyst Eric Jacobson on March 10. The highest grade is an A and the worst is an F.

Morningstar's Jacobson reaffirmed its Gold Rating on Bill Gross's flagship $236 billion Pimco Total Return as "Gross is still one of the best around; modest showings in 2011 and 2013 were disappointing, but expectations of perfection weren't realistic either."

But on Thursday, Pimco was replaced by TCW Group Inc as the subadvisor of a $1.3 billion bond fund offered by Columbia Management Investment Advisers LLC. According to a source familiar with the situation, the move out of Pimco had been in the works since October and was unrelated to the management shakeup at Pimco.

(Reporting By Jennifer Ablan; Editing by Bernard Orr)

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