Two months before his unexpected departure in January as head of global equities at Pacific Investment Management Co., Neel Kashkari told top California Republican Party officials he was giving up the asset management business because he wanted to run for governor.
But investment management consultants and executive recruiters speculate that Mr. Kashkari left in part because he had a tough time building an equities business at a huge player in the fixed-income world.
Despite a three-year effort that began in early 2010, shortly after Mr. Kashkari's hiring, equity assets under management totaled only $9.9 billion as of Feb. 15, not even 1% of the firm's $2 trillion in assets.
Of that amount, about 20% is in institutional strategies. The remainder is in six equity mutual funds, whose performance mostly has been less than spectacular.
Karin Anderson, analyst at Morningstar Inc., Chicago, said given the equity funds' “peripheral” role in PIMCO's overall assets, she could understand why Mr. Kashkari might have felt frustrated and decided to leave.
“Was there really much more for him to do?” she asked.
Commenting on PIMCO's attempt to build its equity business, Michael Castine, chairman of asset and wealth management, at Korn/Ferry International, said: “It's an experiment past the sell-by date, which is probably why Neel left.”
But Jim Brulte, expected to become chairman of the California Republican party next month, said Mr. Kashkari told him he would be leaving PIMCO to run for statewide elected office because his heart was in public service.
Mr. Kashkari wouldn't comment on whether job frustrations or the difficulty in building an equity business contributed to his departure.
In an e-mailed response to questions, he reiterated the statement he made when he quit PIMCO — that he wanted to return to “public service.” He said his tenure as former assistant Treasury secretary for financial stability in charge of the $700 billion Troubled Asset Relief Program, which bailed out banks and insurers during the financial crisis, was the most rewarding job he's had.