UPDATE 1-Pimco names El-Erian CEO; Thompson to retire

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NEW YORK, Sept 5 (Reuters) - Pacific Investment Management Co, the world's biggest manager of bond funds, named Mohamed El-Erian as its sole chief executive after co-CEO Bill Thompson retires at the end of the year.

El-Erian returned to Pimco as co-CEO in January from Harvard University, where for two years he managed the school's $35 billion endowment. A specialist in emerging markets bonds with a record of outperformance, El-Erian had left Pimco to run the Harvard endowment, which is the world's largest.

El-Erian, 50, will also continue in his role as co-chief investment officer with founder Bill Gross, the Newport Beach, California-based company said late Thursday.

Thompson, 63, led Pimco for 15 years. During that period, the firm expanded from 125 employees and $40 billion in assets more than 1,000 employees and $840 billion of assets.

"PIMCO is going from 'strength to strength' as Mohamed takes the CEO reins from Bill," Gross said in a statement.

German insurer Allianz (ALVG.DE) bought about 70 percent of Pimco in 2000. (Reporting by Joe Giannone in New York and Sweta Singh in Bangalore; Editing by Jacqueline Wong and Lisa Von Ahn)