NEW YORK Jan 25 Scott Simon, a managing
director at Pacific Investment Management Co who heads mortgage-
and asset-backed securities investing, plans to retire from the
manager of the world's largest bond fund, a source familiar with
the situation said.
Simon's departure follows that of Neel Kashkari, managing
director and head of global equities at PIMCO, who is leaving
the firm to consider running for public office in California as
a Republican, according to people familiar with the
Simon's savvy bets in mortgage-backed securities have helped
PIMCO, which oversees $1.92 trillion in assets, turn 2012 into
one of its most successful years in investing. His departure was
first reported by Bloomberg.
Mortgage debt is the largest holding of Pimco's $285 billion
Total Return Fund (PTTRX) - the largest mutual fund in the world
- after the firm last year repeated a successful bet from 2008
that the Federal Reserve would buy government-backed home-loan
securities to boost the economy. The fund, managed by Bill
Gross, was 42 percent invested in mortgages in December, down
from 44 percent the previous month.
The Total Return fund, which is Pacific Investment
Management Co's flagship bond fund, earned a return of 10.36
percent in 2012, besting 88 percent of U.S. intermediate-term
bond funds, according to Morningstar. The fund also attracted
$18 billion in new cash over the year, Morningstar said.