Russell Investments has moved at least $2 billion that was managed by PIMCO in its multimanager strategies and funds, terminating the firm and replacing it with Scout Investments, filings and company statements show.
Russell said it hired Scout to replace Pacific Investment Management Co. in its U.S. short-duration and core-plus multimanager bond portfolios, according to a statement Thursday from Gerard Fitzpatrick, global chief investment officer, fixed income.
Mr. Fitzpatrick said he believes Scout will successfully fulfill the role of a top-down sector-rotator in the multistrategy, multimanager, fixed-income portfolios.
“Despite (William H.) Gross’ abrupt departure, Russell’s manager research team continues to believe PIMCO has the management, skills and resources to add value over the long term,” Mr. Fitzpatrick said in the statement. “However, for many Russell products, Russell has identified compelling alternatives. In those products globally, Russell already has taken the necessary steps to incorporate newly assigned managers in place of PIMCO. In other portfolios, the allocation to PIMCO products has been reduced or maintained.”
The statement didn’t say how much PIMCO managed for Russell, in what strategies, and how much the allocation was reduced. Steve Claiborne, a spokesman for the company, said no additional information was available.
However, Russell’s website shows that Scout was hired to run 15% of the $7.3 billion Russell Strategic Bond Fund. PIMCO had previously managed 20% of the fund, as of March 31, according to a Russell fact sheet. At press time, the distribution of the remaining assets PIMCO managed in this fund could not be determined.
Russell’s website also shows Scout taking over 25% of the $1.2 billion Short Duration Bond Fund. A Russell fact sheet shows PIMCO managed 45% of the assets of the fund as of March 31. The remainder of the allocation is now being managed by Russell Investments.The website does not list information on multimanager separate accounts that included PIMCO as a manger, but sources said PIMCO was also terminated from some of those.