Long seen as the heir apparent to Pacific Investment Management Co Co-Founder Bill Gross, Pimco's Chief Executive and Co-Chief Investment Officer Mohamed El-Erian will resign from his post at the world's biggest bond fund manager, Reuters reported.
No reason was given for his departure, both from the side of Pimco and El-Erian. The report said his resignation comes at a time when a lot of investors are shying away from the types of bond investments Pimco has been known for. Investment research company Morningstar revealed that last year, clients took out a total of $41.1 billion from the company's flagship Total Return Fund which is considered a record amount for the fund that manages $2 trillion.
The 55-year old El-Erian has been the public face of Pimco in recent years, being present in industry conferences and making regular cable television appearances. Two years ago, Bill Gross said that he expected El-Erian to take over his post when he resigns, the report said. Gross tweeted on Tuesday, January 21, "PIMCO's fully engaged. Batteries 110 percent charged. I'm ready to go for another 40 years!"
El-Erian's departure was big news for the investment industry where Pimco has a large role. Lipper Senior Research Analyst told Reuters, "Mohamed El-Erian helped set the strategic direction of the company and it certainly makes a difference when someone who is used to making such headlines leaves a company." He said it is uncertain what kind of impact El-Erian's resignation will have "but it will have an impact."
In a statement, Pimco said El-Erian will be leaving the company in the middle of March and Chief Operating Officer Douglas Hodge will become the Chief Executive. Meanwhile, Gross will become the firm's sole Chief Investment Officer. El-Erian will continue to be a consultant Pimco's parent company, Allianz, the report said.
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