Pimco Chief Executive Officer Douglas Hodge told German newspaper Euro am Sonntag that the departure of Mohamed El-Erian was a big surprise for everyone, Reuters reported. However, he added that they were able to cope with the situation and apportion his responsibilities quickly because of an internal succession plan.
The announcement of El-Erian in January that he would be leaving the firm created a stir in the investment community. Long been viewed as the heir apparent of Pimco Co-Founder Bill Gross, he is set to depart from the unit of Germany-based insurance firm Allianz in the middle of this month, the report said.
The German newspaper quoted Hodge as saying, "Mohamed El-Erian's departure was a very personal decision and was a big surprise for all of us."
According to Hodge, the resignation of El-Erian, his predecessor, marked the third time that the top management made changes in the more than four decades of Pimco's existence. The newspaper also quoted him as saying, "But we have always of course a succession plan and a strong team. That's why we could quickly distribute Mohamed's tasks internally."
Hodge added that the changes made in how Pimco distributed the tasks would also give it the chance to implement changes so that it would be able to handle the rapid growth it had been experiencing in the past few years. It would also allow them to accommodate changes happening because of the conditions in the market and the demands of clients, the report said.
Meanwhile, institutional investors in the US have also said that they are tracking how the events in Pimco unfold after El-Erian's sudden resignation and the bitterness that happened between him and Gross, the report said. Reuters reported on March 7, 2014 that Gross had accused El-Erian of trying to "undermine" him when he talked to The Wall Street Journal about the issues simmering between the two of them.
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