By Jennifer Ablan
NEW YORK Jan 29 Pimco on Wednesday promoted
another four of its top investment managers into more strategic
roles, expanding the pool of potential successors to the fund
management firm's co-founder and star bond picker Bill Gross
following the sudden resignation of his previous heir apparent.
Mark Kiesel, Virginie Maisonneuve, Scott Mather and Mihir
Worah, currently managing directors at Pacific Investment
Management Co, will become deputy chief investment officers,
Pimco said in a statement.
The four will join Dan Ivascyn and Andrew Balls, who were
appointed last week after Mohamed El-Erian, who is the chief
executive officer and who shares the chief investment officer
role with Gross, abruptly announced plans to resign from Pimco,
the world's largest bond fund manager.
The ongoing shakeup comes as many investors are turning
their backs on the kind of bond investments Pimco is famous for
offering. In fact, last April Gross went so far as to declare
the three-decade bull run for bonds to be over.
Reflecting that, several of the new appointments have
expertise outside of the fixed-income sector, which has long
been Pimco's bread-and-butter business. Maisonneuve, for
instance, recently joined Pimco in January to succeed Neel
Kashkari as the Newport Beach, California-based firm's global
head of equities.
"Our six deputy CIOs demonstrate the strength, depth and
breadth of investment talent at Pimco," Gross, 69, said in a
statement. "Individually and as a team they have delivered for
clients consistently, and they will now help lead Pimco's
investing excellence into the future."
El-Erian, who had been widely seen as the heir apparent to
Gross, will leave the firm in mid-March. Gross, who shared the
title of co-chief investment officer, will become the sole CIO.
El-Erian will remain a consultant at Allianz, the
German insurer that owns Pimco.
Allianz granted Pimco in 2011 full control of its global
distribution of its products - a move that had given the world's
largest bond fund more independence as it expanded into new
The reorganization had given Pimco more independence from
its corporate parent as it expanded into equities and other
asset classes as well as products - a move that El-Erian then
told Reuters was "another step in Pimco's ongoing evolution as
the complete provider of global investment solutions for our
clients around the world."
Pacific Investment Management Co had $1.92 trillion in
assets as of Dec. 31, according to the firm's website.
BOND KING's SUCCESSOR STILL SEEN IN DOUBT
Even though Allianz's PIMCO quickly appointed Douglas Hodge
as chief executive officer last week plus six new deputy CIOs to
replace El-Erian, analysts and investors agree that none are
real contenders for Gross' job right now.
A CEO selection committee comprised of senior Pimco managing
directors appointed Hodge as chief executive officer. The
appointment of deputy CIOs was likewise made by Pimco, according
to a Pimco spokesperson.
"I think that it is very clearly an effort on Bill Gross and
Pimco's part to reassure clients, in particular, that not only
have they worked on succession planning in the past but that
there are real people identified in that process to take over if
necessary," said Morningstar senior research analyst Eric
He added: "I just don't see any single heir apparent at this
point. I do think it remains an open question whether any of
these folks are in a position to truly challenge Bill Gross's
investment ideas and macro thinking."
The management overhaul comes against the backdrop of a
rough 2013: Customers withdrew $41.1 billion from Pimco's
flagship Total Return Fund last year, a record amount for the $2
trillion manager, according to investment research firm
Pimco also said that managing directors Charles Lahr and
Marc Seidner will leave, while Sudi Mariappa will re-join as a
managing director and generalist portfolio manager.
Mariappa will return to Pimco from GLG where he has served
since 2012 co-managing that firm's absolute return fixed income
offering. He was previously at Pimco from 2000-2011 as a
managing director, portfolio manager and senior adviser.
Interviewed on CNBC, Gross said about El-Erian: "We're
disappointed that he won't be with Pimco, that he didn't
continue with the successor role for me as chief investment
officer - but that is the way it is and we're going to move
This past weekend, Pimco replaced the ubiquitous photo of
Gross and El-Erian on its Twitter stream, which has attracted
over 164,000 followers, with the firm's logo.