The money spigot is expected to keep flowing for PIMCO competitors who are working hard to snare the billions in fixed-income investments in play following September's departure of William H. Gross from the firm he co-founded.
Western Asset Management Co., TCW Group Inc., DoubleLine and Loomis Sayles & Co. are among the beneficiaries, said Michael Falk, a consultant to money managers and a partner with Focus Consulting Group in Chicago.
Those firms have sufficient scale to easily digest big new amounts of assets in a bond market plagued by low interest rates, tight spreads and low liquidity, Mr. Falk said.
Spokesmen from WAMCO, TCW, and DoubleLine declined to comment. Loomis Sayles did not respond to inquiries for this story.
Money managers interviewed say the assets in play are mostly from PIMCO's $201.5 billion Total Return Fund, and to a lesser extent the $20 billion PIMCO Unconstrained Bond Fund, both of which Mr. Gross managed.
They say other assets under management at PIMCO are not in play. They say they expect PIMCO to keep those assets unless the strategies start performing poorly.
But the competitors to PIMCO insist that momentum is in their favor. Even if the new investment team on the Total Return Fund starts producing solid results, it will be at least several years before the tide turns for PIMCO, because a new team managing the funds needs to build a track record, they say.
Mr. Falk said he expects Janus Capital Group, Mr. Gross' new home, will also be a major recipient of inflows. Analysts have estimated Janus could receive as much as $45 billion in assets in the next two years.
While the odds and their capabilities may favor larger managers, medium-sized firms also are benefiting. Russell Investments, for example, chose Scout Investments, with $17.7 billion in fixed-income assets, to manage money it moved from PIMCO, while the board of the San Francisco Employees' Retirement Plan is expected to replace PIMCO's Total Return Fund with a fund from Baird Advisors, with around $25.8 billion in fixed-income assets.
In comparison, WAMCO manages $471 billion in fixed-income assets, TCW manages $105 billion and DoubleLine manages almost $56 billion.
Mr. Falk said large amount of money flowing from PIMCO creates opportunity for competitors to grow their assets under management. “It's a gold rush,” he said.
The thorny question, however, is how to strike gold without being too obvious. “We don't want to seem like a vulture,” said one fixed-income manager, who asked that neither he nor his firm be named.