Updated with correction
Pacific Investment Management Co. has been in the spotlight since November after a lawsuit was filed by current and former female employees alleging gender and pay discrimination, sexual harassment and other employment issues, but despite the buzz, asset owners are staying on the sidelines for now.
PIMCO categorically denied the allegations in a response to the plaintiffs' lawsuit in a court filing on March 10.
Since the lawsuit was filed, P&I's reporting hasn't shown any terminations of PIMCO by institutional investors, who say they are monitoring the dispute. Newport Beach, Calif.-based PIMCO managed $2.21 trillion as of Dec. 31.
Investment consultant NEPC LLC, Boston, declined to comment about PIMCO in response to P&I's request but said in a due diligence report to clients obtained by P&I that the firm has placed PIMCO on watch because of the plaintiffs' lawsuit.
NEPC said in the report that it "will monitor the (lawsuit) for resolution and any findings or other information pertaining to the issue. NEPC will engage with PIMCO on their specific efforts relating to diversity, equity and inclusion, as well as metrics relating to the topic."
A pension fund CIO who knows PIMCO well and whose fund invests with the firm said on condition of anonymity that "the concern about PIMCO and these allegations is whether there is a systemic problem there. I've spoken with senior female executives at PIMCO about discrimination issues and they said they don't see it, that it isn't happening."
"My takeaway is that this is a serious issue for PIMCO, but you have to let the facts play out," the CIO said.
The fund has not placed PIMCO on its watchlist.
The original complaint against PIMCO was filed in California Superior Court in Santa Ana on Nov. 17 on behalf of two plaintiffs and was expanded on Feb. 18 to include three additional plaintiffs.
The charges in the amended complaint allege violations of the California Fair Employment and Housing Act and the federal Equal Pay Act; gender, disability and pay discrimination; and instances of sexual harassment, stalking and retaliation by male employees.
The two former PIMCO employees who are part of the lawsuit were in administrative or executive assistant positions while the titles among the three who still work for PIMCO are administrative assistant, vice president and project manager.
In its legal filing, PIMCO said the sources of disputes between the firm and the plaintiffs were performance-related rather than about discrimination or other employment issues. "As the court filing … shows, when the language the plaintiffs used to create a false image of a workplace is stripped away, what remains are five separate and unrelated instances of disputes over performance, pace of advancement and workplace logistics," said Michael Reid, a PIMCO spokesman, in an email.
PIMCO said in the court documents that it has anti-discrimination, harassment and retaliation policies in place and urges employees to report incidents violating the policies, noting that complaints are immediately investigated and action is taken if warranted.
Plaintiffs' attorney Nancy Abrolat, head of Abrolat Law PC, El Segundo, Calif., said in an email reaction to PIMCO's court filing that "it is absurd (that) the company is spending so much effort employing delay tactics to stop these women from seeking justice while doing absolutely nothing to address systemic issues of harassment, abuse and discrimination under their own roof."
With regard to promotion of female employees, only one of seven newly appointed managing directors PIMCO named Wednesday in a news release was a woman: Sonali Shah Pier, a portfolio manager focused on high-yield and multicredit strategies.
In an email, PIMCO spokeswoman Agnes Crane referred questions to the news release, which didn’t address a question about why just one female employee was promoted. She declined to provide further details.
PIMCO noted in its court filing that within the firm’s senior leadership group, including managing director, executive vice president and senior vice president positions, 25% are women (up from 11% in 2010); 70% are over 40 years old; and 27% are minorities (up from 9% in 2010), PIMCO said in the filing.
In addition, 36% of PIMCO’s executive committee are women, the PIMCO court document said.