Illinois Teachers' Retirement System, Springfield, will not terminate any of the nine strategies managed for it by Pacific Investment Management Co., but likely will keep the company on its watchlist.
The $45.3 billion pension fund's investment staff has had “backup portfolio managers” lined up since rumors started swirling earlier this year of the departure of William H. Gross, co-founder and former chief investment officer, said Scottie Bevill, senior investment officer for fixed income and real assets, to trustees at an investment committee meeting on Wednesday.
Mr. Bevill expressed confidence in PIMCO's remaining investment staff and was particularly enthusiastic about the new $500 million unconstrained fixed-income strategic partnership arrangement PIMCO was awarded by the TRS board in August.
Greg Turk, director of investments, joked during the meeting that Janus Capital Group, which Mr. Gross joined in late September, as well as other bond managers, have been “calling daily with offers to help us with our PIMCO problem.”
PIMCO manages a total of about $3 billion for the pension fund — all fixed-income, credit or global tactical asset allocation approaches — representing about 6.6% of total fund assets.
PIMCO has been on the pension fund's watchlist for personnel changes since February, when Mohamed El-Erian, PIMCO's former co-chief investment officer, announced he would leave the firm.
Trustees approved the proposed watchlist, with PIMCO on it, during the investment committee meeting. The full board must approve the committee's recommendation at its Friday meeting.