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By Jennifer Ablan
NEW YORK, May 19 (Reuters) - Transamerica Asset Management, Inc. has terminated Pacific Investment Management Company as an investment subadvisor to an inflation-protected bond fund, effective in the fourth quarter, according to an SEC filing on Monday.
Transamerica Asset Management, a third-party asset manager with $65.6 billion in assets under management, says it replaced Pimco with Pinebridge Investments LLC and will rename the fixed-income portfolio to Transamerica PineBridge Inflation Opportunities VP, the filing said.
Calls to Transamerica and Pimco were not immediately returned
Pimco has been rattled by a management shakeup and disappointing performance. Investors pulled another $3.1 billion from the flagship Pimco Total Return Fund in April, the 12th straight month of outflows from the world’s largest bond fund.
The fund has now seen a total of $55.26 billion in net outflows since last May.
Pimco, overseen by Bill Gross, has seen more than $20 billion of outflows from U.S. open-end mutual funds in the first four months of this year, according to Morningstar data.
PineBridge will seek to achieve the portfolio’s investment objective by investing at least 80 percent of the portfolio’s net assets - plus the amount of borrowings, if any, for investment purposes - in inflation-indexed fixed income securities issued by domestic and foreign governments, their agencies or instrumentalities, and corporations.
Mutual fund subadvisers are money managers hired by a fund’s adviser to run all or a portion of a fund’s assets under the direction of the adviser, who is otherwise accountable directly to the fund’s board.
It has become popular in recent years, for example, for financial firms without specific portfolio management expertise to set up funds and then farm out the actual day-to-day management responsibility to one or more asset managers who act as subadvisers. (Reporting By Jennifer Ablan; Editing by Chris Reese)