The long-standing domination in fixed income by PIMCO, BlackRock and Western Asset Management is starting to show some cracks.
Although the powerhouse money managers remain a force to be reckoned with, BlackRock Inc. and Western Asset Management Co., a subsidiary of Legg Mason Inc., both got hammered last year after making some bad bets on the housing market, leaving Pacific Investment Management Co. LLC as the lone success story among the three.
This change in fortunes has thrown open doors for some management firms that, until recently, didn't have much of a shot against the fixed-income oligopoly.
“This disruption is a new phenomenon, I would say,” according to Benjamin F. Phillips, partner and director of research at Casey, Quirk & Associates, Boston. “Does it unseat the Big Three? Probably not. What it does is prove that this is not only a game for the Big Three.”
The biggest winners in the total number of placements for institutional domestic fixed-income portfolios in the 18-month period ended June 30 were PIMCO, Sage Advisory Services Ltd. Co., Loomis, Sayles & Co. LP and Income Research & Management, according to data from Eager, Davis & Holmes LLC, Louisville, Ky.
Meg Clough, a spokeswoman for Loomis, Sayles, Boston, said the company has been grabbing more than its fair share whenever an opportunity for new business arises. And lately, there has been a lot more opportunity, she said. In the last six months, Loomis has brought in $30 billion in net new business, of which 90% was from fixed-income strategies, Ms. Clough said.