Pimco reports record $446.5m outflow in the wake of Gross's departure
A record $446.5m was yanked from an exchange-traded fund under the control of Pacific Investment Management Co. (PIMCO) co-founder Bill Gross, after he announced his intention to leave the company on Friday.
Pimco’s $3.1bn Total Return bond has dropped 0.17% following Gross’s announcement that he was leaving the firm for Janus Capital Group.
Total Return was stripped of its gold rating by Morningstar early on Tuesday, after the fund research firm cited uncertainty over outflows in the wake of the departure of co-founder Bill Gross.
On Monday, the Wall Street Journal reported that investors had withdrawn more than $10bn from Pimco, after Gross announced he was leaving the firm.
According to Morningstar, those outflows could be only the beginning and the fund research firm suggested that it’s “likely tens of billions, if not hundreds of billions” in assets will follow Gross to Janus Capital, where he will be in charge of a new unconstrained bond fund.
According to estimates from an analyst at Citi, the potential assets outflow from Pimco could be in the region of $400bn, 20% of the firm’s total assets.
“Given Bill Gross’ abrupt departure, investors have focused on the possibility that outflows could wreak havoc on the portfolio,” Eric Jacobson, senior analyst at Morningstar, said in a note.