The Gross effect
Skip to main content
pilogo-NEW
Subscribe
  • Subscribe
  • My Account
  • login
  • NEWS
    • Asset owners and the coronavirus
    • Alternatives
    • Consultants
    • Coronavirus
    • Defined Contribution
    • ESG
    • Frontlines
    • Hedge Funds
    • Investing / Portfolio Strategies
    • Money Management
    • Pension Funds
    • People Moves
    • Private Equity
    • Real Estate
    • Searches & Hires News
    • SECURE Act
    • Special Reports
    • WorldPensionSummit
    • Ron Schmitz
      Pandemic drives faster transition for Virginia to private markets
      Mubadala Investment Co. logo
      Mubadala draws on portfolio in coronavirus fight
      T.J. Carlson
      Texas Muni reduces downside risk during pandemic, finding opportunities now
      Scott Davis
      ‘Triage plan’ at Indiana system helped stem losses
    • Comvest closes credit fund at $1.3 billion
      Wall Street signage in the Financial District of New York
      Assets in alternative investments set record in 2020
      Non-profit questions dividend recapitalization play at Ares portfolio company
      Walker & Dunlop appoints managing director
    • Philip Pearson
      Hymans Robertson chooses head of LGPS investment
      Daniel Celeghin
      Indefi hires New York-based managing partner
      Hub International continues buying spree with IBG acquisition
      Callan brings on 2 executives
    • Pandemic takes toll on real estate fundraising in 2020
      Swedish flags fly from a tourist souvenir shop in Gamla Stan in Stockholm on March 26, 2020
      Systematic hedge fund IPM to shutter after ‘lackluster’ performance, outflows
      Insurers taking on more portfolio risk as pandemic ebbs – survey
      American flags outside the New York Stock Exchange
      Stock shorts collapse as no hedge fund wants ‘head ripped off’
    • Pie chart showing different categories of asset allocation with a calculator
      Record keepers answer the call for adviser managed accounts
      Comfortable retirement still on track for most Americans despite pandemic – survey
      Pentegra joins with EPIC to offer 3(16) fiduciary services
      Interest rises in keeping retiree assets in-plan
    • CDPQ boosts low-carbon assets to 10% of portfolio
      White House sets ambitious goal for greenhouse gas emissions by 2030
      Yale rolls out 5 principles for endowment on fossil-fuel investing
      Pension funds hear from beneficiaries on ESG – report
    • Girls Who Invest
      MetLife plans 3 internships for Girls Who Invest scholars
      Model home
      Resmark sees niche in buying, leasing model homes
      Riscura stories
      Dystopian tales explore altered retirement reality
      Joel Holsinger
      Ares wants to do good – and profit – with fund
    • The New York Stock Exchange reflected in a window of Federal Hall
      Infinity Q Capital to liquidate hedge fund due to mispricing
      Swedish flags fly from a tourist souvenir shop in Gamla Stan in Stockholm on March 26, 2020
      Systematic hedge fund IPM to shutter after ‘lackluster’ performance, outflows
      Karen Karniol-Tambour
      Bridgewater appoints 2 co-CIOs to oversee new sustainable investing group
      Hedge funds post best first-quarter return since 2000
    • Ilmarinen seeds AXA Investment Managers fixed-income ESG fund
      Edwin Denson
      Wisconsin Investment Board names new executive director and CIO
      A statue of Albert Gallatin outside Treasury Department headquarters in Washington
      Scale of T-bill drought hinges on Biden rescue, income-tax haul
      The seal of the Securities and Exchanges Commission at the agency's headquarters in Washington
      SEC said to review fund disclosure rules after Archegos rout
    • Blackstone AUM climbs 4.9% in latest quarter
      Trillium hires 2 to lead expansion into U.K.
      Credit Suisse logo
      Credit Suisse expects further hit from Archegos scandal
      Bill Hench
      First Eagle gives wing to small-cap equity team with liftout from Royce
    • Edwin Denson
      Wisconsin Investment Board names new executive director and CIO
      Denmark’s ATP plans bid to build North Sea energy island
      Pennsylvania State Capitol in Harrisburg
      PennPSERS taps Verus for oversight consulting services amid probe
      State pension plan funding advances in first quarter – Wilshire
    • Edwin Denson
      Wisconsin Investment Board names new executive director and CIO
      Trillium hires 2 to lead expansion into U.K.
      Walker & Dunlop appoints managing director
      Bill Hench
      First Eagle gives wing to small-cap equity team with liftout from Royce
    • EQT closes latest private equity fund at $18.7 billion
      U.S. $100 bills
      AlpInvest raises $3.5 billion for latest co-investment fund
      ILPA members making diversity a bigger priority in private equity
      European private equity deal value, volume hit records for first quarter
    • Pandemic takes toll on real estate fundraising in 2020
      J. Tomlinson Hill
      Two Sigma takes quant expertise into real estate investing
      BentallGreenOak closes latest European fund at $2.3 billion
      Cohen & Steers adds team for new private real estate business
    • Andy Schreiner
      New PEPs targeting firms without retirement plans
      Jackie Walorski
      Contribution catch-up for caregivers gaining favor
      Retirement cartoon
      Hopes rising for retirement readiness in 2021
      Neal and Brady
      Retirement security could be only issue both sides accept
    • A coin representing Bitcoin cryptocurrency in the U.K.
      Cryptocurrency and digital assets
      Corporate pension contributions
      Eddy Awards 2021
      COVID-19: One year in
    • U.S. still a key market for investors
      Collected coverage of P&I's 2020 WorldPensionSummit
      Pedestrians pass a large advertisement on the Arndale Center shopping mall reading 'Act now to avoid a local lockdown' in Manchester, England
      COVID-19 puts new opportunities and risks on the agenda - WPS panelists
      Screens display stock price information over the trading floor of the NYSE Euronext exchange in Paris
      Private assets will continue to grow in portfolios – WPS panelists
  • Data
    • Research Center
    • Searches & Hires Database
    • Searches & Hires News
    • RFPs
    • Charts / Infographics
    • Sponsored Research
    • Trackers
    • Q2 2020 searches and hires overview report
      Q2 2020 money manager M&A activity summary
      Q2 2020 legal overview report
      Q1 2020 searches and hires overview report
    • Louisiana Municipal Police collars HarbourVest to run fund of one
      Oregon earmarks $960 million for 5 alts funds
      Ilmarinen seeds AXA Investment Managers fixed-income ESG fund
      Orange County Employees commits $55 million to 2 buyout funds
    • Louisiana Municipal Police collars HarbourVest to run fund of one
      Oregon earmarks $960 million for 5 alts funds
      Ilmarinen seeds AXA Investment Managers fixed-income ESG fund
      Orange County Employees commits $55 million to 2 buyout funds
    • Emerging Market Debt Manager Services
      Real Assets Consultant
      Passive Investment Management Services
      Active Extended Global Credit Manager Search
    • High-yield spreads narrow, default rates drop
      Private real estate funds continue rebound
      Managed account adoption stalls in 2020
      U.S. bonds have worst quarterly return since 1981
    • Institutional Investors: Shared Expectations, Divergent Paths
      Global Investor Study 2016
      Workplace Financial Wellness
    • U.S. Endowment Returns Tracker
      Pension Fund Returns Tracker
      Earnings Tracker
      Corporate Pension Contribution Tracker
  • Insights
    • Opinion
    • White Papers
    • Industry Voices
    • Letters to the Editor
    • Partner Content
    • Publisher's Update
    • Marcie Frost
      CalPERS: Urgency underscores all areas of providing retirement security
      BPTW cartoon
      P&I’s Best Places to Work marking a milestone
      CalPERS cartoon
      Urgency underscores CalPERS' search for a CIO
      Multiemployer plans cartoon
      Money — but no fixes — for multiemployer plans
    • Bipsync Client Stories: RMS in Action at Pensions and Superannuation Funds
      COVID-19 Makes LP Portfolio Management More Important Than Ever
      China: the outlook is bright for longer-term investors
      Finding Differentiation in Securitized Assets
    • Robert Pozen
      Commentary: Maintaining corporate culture in an era of remote work
      John Bakarat
      Commentary: COVID-19 and real estate debt – where investors should be looking
      Jake Remley
      Commentary: Inflation expectations vs. reality in the bond market
      Greg Shea and Steven Kindred
      Commentary: The solution for yield-seeking allocators may be hiding in plain sight
    • Marcie Frost
      CalPERS: Urgency underscores all areas of providing retirement security
      Writer using a typewriter
      OCIO industry needs to adopt GIPS
      Writer or journalist workplace. stock illustration
      Even as it assails China, Trump administration emulates it
      Skeptical of Main Street support for proxy adviser proposal
    • P&I Content Solutions
      Research for Institutional Money Management
      P&I Content Solutions
      Top questions for institutional investors
      Sponsored Content By Newton Investment Management
      Growth and Innovation in Emerging Markets
      P&I Content Solutions
      In Challenging Markets, Systematic Global Macro Strategies Could Hold Opportunity
    • Help us help you by supporting quality journalism
      You Must Believe in Spring
      Everything Must Change
      Tomatoes & Investments
  • Multimedia
    • Videos
    • Webinars
    • Polls
    • Slideshows
    • Charts / Infographics
    • Invesco logo shown on the floor of the New York Stock Exchange
      watch video
      1:28
      Invesco’s bid for performance gains
      watch video
      1:23
      The passive fixed-income glut
      watch video
      1:38
      Is it time for DC plans to embrace private equity?
      watch video
      5:39
      The coronavirus pandemic: One year later
    • New Outlook on Income: A Framework for Evaluating DC Retirement Income Solutions
      Investing in infrastructure at the right price
      Time for Action: Shifting Pension Dynamics from a Macro and Regulatory Relief Perspective
      Understanding the PEP Evolution
    • POLL: Cryptocurrency investing
      POLL: The Biden infrastructure plan
      POLL: Retirement income solutions
      POLL: Working after the pandemic
    • view gallery
      9 photos
      Coronavirus and the markets
      view gallery
      22 photos
      The 1,000 largest retirement funds: 2020
      view gallery
      10 photos
      Outlook 2020
      view gallery
      10 photos
      2019 as seen through the eyes of Roger
    • High-yield spreads narrow, default rates drop
      By the Numbers for April 2021
      Graphic: The state of DC plans
  • Events
    • Conferences
    • Webinars
    • ESG Investing Virtual Series
      Private Markets Virtual Series
      Retirement Income Conference
    • New Outlook on Income: A Framework for Evaluating DC Retirement Income Solutions
      Investing in infrastructure at the right price
      Time for Action: Shifting Pension Dynamics from a Macro and Regulatory Relief Perspective
      Understanding the PEP Evolution
  • Careers
  • Research Center
MENU
Breadcrumb
  1. Home
  2. INVESTING & PORTFOLIO STRATEGIES
October 13, 2014 01:00 AM

The Gross effect

  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print
    Bloomberg
    William H. Gross

    Many asset owner clients of Pacific Investment Management Co. cited their long-term relationship with the firm — ties that go beyond co-founder and Chief Investment Officer William H. Gross — as a reason for not terminating the firm after Mr. Gross' unexpected move last month to Janus Capital Group.

    Most of the public, corporate and non-profit asset owners interviewed by Pensions & Investments are reviewing their PIMCO investments, possibly putting the firm on watch, but not making immediate changes.

    Following is a recap of what many of them are doing, and why.

    The Teachers' Retirement System of the State of Illinois, Springfield, has $3 billion with PIMCO in nine strategies — all fixed income, credit or global tactical asset allocation approaches — representing about 6.6% of total fund assets.

    The fund put PIMCO on its watch list in February after former CEO and co-Chief Investment Officer Mohamed El-Erian left, but the system's staff has no plans to terminate the manager.

    “(We) have enjoyed a relationship that over the years has broadened into one that has tapped into the many talented professionals and unique strategies at PIMCO,” said Richard W. Ingram, Illinois TRS' executive director, in an e-mailed statement.

    Texas Municipal Retirement System, Austin, which has $23.4 billion in assets, has $2 billion with PIMCO in core-plus fixed income. The system put PIMCO on watch because of the departure of Mr. Gross, said spokesman Bill Wallace, in an e-mail. While Mr. Gross was not directly involved in the management of the pension fund's portfolio, “any departure of key personnel in a manager may be reflected in the watch status,” he wrote.

    The New York City Retirement Systems, whose five pension funds have a combined $150 billion in assets, are reviewing the $7.08 billion total invested with PIMCO as of June 30, said Eric Sumberg, spokesman for Scott Stringer, New York City comptroller, who oversees the assets.

    State of Michigan Department of Treasury, Bureau of Investments, Lansing, is not taking action now on the total $1.7 billion PIMCO manages for State of Michigan Retirement Systems' $60.2 billion defined benefit plan and $6.2 billion in combined 401(k) and 457 plan assets. Bureau staff are “monitoring the situation,” but “we are not currently planning changes,” said Jon M. Braeutigam, Bureau of Investments chief investment officer, in an e-mail. “We believe there is a 'deep bench,' if you will, at PIMCO.”

    Minnesota State Board of Investment, St. Paul, has about $1.3 billion in exposure to PIMCO in a core-plus fixed-income separate account. Executives are “assessing the situation,” said Mansco Perry III, executive director. “We don't make knee-jerk decisions.” Mr. Perry declined to comment further. The board oversees $79.8 billion in assets, including $59.4 billion for state pension plans.

    The $30.3 billion Indiana Public Retirement System, Indianapolis, continues to have PIMCO on watch for the $1.12 billion in assets it manages. “We will continue to carefully monitor any new developments,” said Jennifer Dunlap, INPRS spokeswoman. Indiana PRS had had PIMCO on watch since Jan. 31 because of Mr. El-Erian's departure.

    North Dakota Retirement and Investment Office, Bismarck, has a total $460 million assets with PIMCO invested in four strategies. The North Dakota office will continue to monitor the recent management changes at PIMCO, David Hunter, executive director and chief investment officer, said in an e-mail. The Retirement and Investment Office oversees the $9.2 billion North Dakota State Investment Board, including $4.7 billion in pension assets.

    St. Louis-based Emerson Electric Co.'s $4.8 billion 401(k) plan has about $160 million in the PIMCO Total Return Fund. “We have not made any decisions regarding the fund but obviously given the recent changes it is under evaluation,” said Doug Schoen, manager, pension investments at Emerson. “But we would not announce anything until we've completed our review … and we're in the midst of that.”

    Dallas/Fort Worth International Airport's defined contribution plans offer the PIMCO Total Return Fund as an investment option. The three plans have a combined $4.2 million of their total $61 million invested with PIMCO. Michael Phemister, vice president of treasury management, said board members are having internal discussions about the strategy in light of Mr. Gross' departure but have not made any decisions to drop PIMCO at this time.

    The University of Notre Dame, South Bend, Ind., which announced in July the PIMCO Global Bond Fund was being added as an investment option in its $1.06 billion 403(b) plan, effective Jan. 1, has not put the firm on watch, said Robert McQuade, university vice president for human resources. “We have not made any decisions concerning PIMCO,” he said. “Our investment committee will have our consultant (Hewitt EnnisKnupp) review PIMCO's status and that will include taking a look at their succession plan.”

    The $7.3 billion New Hampshire Retirement System, Concord, “has been in the process of restructuring its fixed-income portfolio for the past year,” Marty Karlon, spokesman, said in a statement. “We have already made some changes and more are expected. The changes at PIMCO will be factored into future discussions regarding the fixed-income portfolio.”

    The $28 billion Iowa Public Employees' Retirement System, Des Moines, “is evaluating several possible courses of action” regarding its $1.3 billion core-plus bond strategy, managed by PIMCO, said Karl Koch, IPERS' chief investment officer, in an e-mail. Mr. Koch said there were no further details to disclose at this stage.

    Illinois State Universities Retirement System, Champaign, has $1.6 billion with PIMCO in four defined benefit plan portfolios and one defined contribution plan portfolio. “SURS and NEPC are currently reviewing the recent organizational changes at PIMCO and will be discussing with the board at the upcoming meeting,” Daniel L. Allen, SURS chief investment officer, said in an e-mail. NEPC Inc. is SURS' investment consultant. SURS oversees $17.2 billion in defined benefit assets and $1.5 billion in 401(a) defined contribution assets.

    Hartford, Conn.-based Hartford Healthcare's 401(a), 403 and 457 plans, with combined assets of $600 million, offer the PIMCO Total Return Fund as an investment option. In all, the plans have $50 million in the fund. PIMCO had been under review “for some time,” going back to the departure of Mr. El-Erian, said David J. Holmgren, chief investment officer. Mr. Holmgren said he would not comment further.

    The San Francisco City & County 457 deferred compensation plan's committee plans to meet Oct. 15 to hear a recommendation from its investment consultant, Angeles Investment Advisors, as to what to do with the $82 million invested in PIMCO Total Return Fund following Mr. Gross' move to Janus, said William Coaker Jr., chief investment officer, San Francisco City & County Employees' Retirement System, which oversees its $20.1 billion defined benefit plan and the $2.7 billion deferred compensation plan.

    Jay Huish, the retirement system's executive director, said in an interview that if the recommendation was to terminate the fund, it would be the first time the plan has ever eliminated a fund from its offering.

    The $90.1 billion North Carolina Retirement Systems, Raleigh, which manages fixed income internally, has some supplementary plan investments in PIMCO, but they are just monitoring the situation for now, said spokesman Schorr Johnson.


    See main story: Some put PIMCO on watch or fire it; others stay on board
    Related Articles
    Some put PIMCO on watch or fire it; others stay on board
    PIMCO upheaval opens doors for real assets firms
    Janus asset drain expected to end
    Risk of star dependence
    Arkansas Teachers terminates $475 million PIMCO portfolio
    Alabama 529 plan drops PIMCO Total Return
    El Paso County drops PIMCO for unconstrained bonds, alters asset targets
    Recommended for You
    More funds testing water on crypto-related assets
    More funds testing water on crypto-related assets
    Money managers eager to make leap to opportunity zone investing
    Money managers eager to make leap to opportunity zone investing
    Index investing: Not as passive as you might think
    Index investing: Not as passive as you might think
    Research for Institutional Money Management
    Sponsored Content: Research for Institutional Money Management
    sponsored
    Events
     
     
    Sponsored
    White Papers
    Bipsync Client Stories: RMS in Action at Pensions and Superannuation Funds
    COVID-19 Makes LP Portfolio Management More Important Than Ever
    China: the outlook is bright for longer-term investors
    Finding Differentiation in Securitized Assets
    Green and sustainable bonds in emerging markets
    Portfolio Protection: One Size Fits None
    View More
    Sponsored Content
    Partner Content
    The Industrialization of ESG Investment
    For institutional investors, ETFs can make meeting liquidity needs easier
    Gold: the most effective commodity investment
    2021 Investment Outlook | Investing Beyond the Pandemic: A Reset for Portfolios
    Ten ways retirement plan professionals add value to plan sponsors
    Gold: an efficient hedge
    View More
    E-MAIL NEWSLETTERS

    Sign up and get the best of News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Today
    April 5, 2021 Page One

    Get access to the news, research and analysis of events affecting the retirement and institutional money management businesses from a worldwide network of reporters and editors.

    Subscribe
    Connect With Us
    • RSS
    • Twitter
    • Facebook
    • LinkedIn

    Our Mission

    To consistently deliver news, research and analysis to the executives who manage the flow of funds in the institutional investment market.

    pilogo-NEW
    About Us

    Main Office
    685 Third Avenue
    Tenth Floor
    New York, NY 10017-4036

    Chicago Office
    150 N. Michigan Ave.
    Chicago, IL 60601

    Contact Us

    Careers at Crain

    About Pensions & Investments

     

    Advertising
    • Media Kit
    • P&I Content Solutions
    • P&I Careers | Post a Job
    • Reprints & Permissions
    Resources
    • Subscribe
    • Newsletters
    • FAQ
    • P&I Research Center
    • Site map
    • Staff Directory
    Legal
    • Privacy Policy
    • Terms and Conditions
    • Privacy Request
    Pensions & Investments
    Copyright © 1996-2021. Crain Communications, Inc. All Rights Reserved.
    • NEWS
      • Asset owners and the coronavirus
      • Alternatives
      • Consultants
      • Coronavirus
      • Defined Contribution
      • ESG
      • Frontlines
      • Hedge Funds
      • Investing / Portfolio Strategies
      • Money Management
      • Pension Funds
      • People Moves
      • Private Equity
      • Real Estate
      • Searches & Hires News
      • SECURE Act
      • Special Reports
      • WorldPensionSummit
    • Data
      • Research Center
      • Searches & Hires Database
      • Searches & Hires News
      • RFPs
      • Charts / Infographics
      • Sponsored Research
      • Trackers
    • Insights
      • Opinion
      • White Papers
      • Industry Voices
      • Letters to the Editor
      • Partner Content
      • Publisher's Update
    • Multimedia
      • Videos
      • Webinars
      • Polls
      • Slideshows
      • Charts / Infographics
    • Events
      • Conferences
      • Webinars
    • Careers
    • Research Center