Pacific Investment Management Co. LLC's U.S. defined contribution assets under management fell 32% to $104.1 billion by year-end 2015, according to the latest Pensions & Investments survey of money managers.
Last year's decline continued an exodus of defined contribution assets from the Newport Beach, Calif., firm.
In 2015, PIMCO dropped to 12th place among DC money managers from ninth place in 2014, when it had $153.3 billion under management in DC assets.
As PIMCO kept falling, first-place Vanguard Group Inc., Malvern, Pa., increased its lead over its peers. For 2015, Vanguard posted $735.97 billion in DC AUM, a 4.3% gain from 2014.
BlackRock Inc., New York, moved into second place, switching places with Fidelity Investments, Boston. BlackRock's $608.2 billion in assets from U.S. institutional defined contribution clients represented a 4% improvement from its year-earlier figure.
Fidelity reported $606.6 billion for 2015, a decline of 2.2% from year-end 2014. Fidelity had been the longtime leader in DC assets under management, relinquishing its first-place title to Vanguard in 2013.
Overall, defined contribution money managers' AUM declined 1.1% to $5.48 trillion from the record $5.54 trillion at year-end 2014; DC assets managed internally slipped 0.9% to $4.79 trillion.
DC consultants said PIMCO during 2015 still suffered from client reaction to the personnel upheaval of 2014. That year, both Mohammed El-Erian, then CEO and co-chief investment officer, and William H. Gross, a co-founder of PIMCO as well as CIO, resigned their posts. Mr. El-Erian is chief economic adviser to Allianz SE, the corporate parent of PIMCO; Mr. Gross joined Janus Capital Group as a portfolio manager.
“A lot of advisers and sponsors had PIMCO under heightened alert after El-Erian left,” said Angelo Auriemma, the Chicago-based director of DC solutions for Plan Sponsor Advisors, a division of Pavilion Advisory Group. “Then, Gross left. There were too many unknowns.”
PIMCO also was hurt by the DC industry trend of assets moving from stand-alone funds into target-date funds, said Mike Volo, senior partner, at consultant Cammack Retirement Group Inc., New York.
“PIMCO still has a hangover from Bill Gross' departure,” said Jason Chepenik, managing partner of Chepenik Financial, Winter Park, Fla., which provides corporate retirement and health-care services as well as individual investment planning services.
“This significant change has led investment committees to look elsewhere,” he said.
Agnes Crane, a PIMCO spokeswoman, declined to comment.