San Francisco Deferred Compensation Plan approved replacing the PIMCO Total Return Fund in light of the resignation of manager William H. Gross.
The board voted to terminate the PIMCO fund and replace it with the Baird Core Plus Bond Fund, managed by Baird Advisors, at a meeting Wednesday of the San Francisco City & County Employees' Retirement System Deferred Compensation Committee.
It now goes for a vote of the full board of the $20 billion San Francisco City & County Employees Retirement System at its meeting on Nov. 12.
Ten percent, or $271 million, of the SFDCP's $2.69 billion in assets are invested in the PIMCO bond fund. About $189 million of assets as of June are in custom target-date funds and another $82 million is in the stand-alone core bond fund investment option, says a report from consultant Angeles Investment Advisors.
Baird will replace PIMCO in both the target-date funds and the stand-alone fund option.
“We believe the abrupt resignation of Bill Gross is a significant negative event for the PIMCO Total Return Fund,” said consultant Leslie Kautz of Angeles Investment Advisors, consultant to the plan, in an Oct. 15 report. “While the firm acted quickly to institute what we believe to be a solid succession plan following Gross' departure, we believe there are too many uncertainties to retain as SFDCP's core bond manager at this time.”
