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Pimco Mortgage Head Scott Simon to Retire From Bond-Fund Manager

Scott Simon, a managing director at Pacific Investment Management Co. who heads mortgage- and asset- backed securities investing, plans to retire from the manager of the world’s largest bond fund.

Simon, 52, said in a telephone interview yesterday he would leave Pimco at the end of May after 13 years with the Newport Beach, California-based firm. Simon said he’s leaving the industry to focus on “my life and my wife.”

He is “one of the best” in the business, said Scott Buchta head of fixed-income strategy at the Brean Capital LLC brokerage. “His keep-it-simple approach served him well over the years.”

Mortgage debt is the largest holding of Pimco’s $285 billion Total Return Fund (PTTRX), after the firm last year repeated a successful bet from 2008 that the Federal Reserve would buy government-backed home-loan securities to boost the economy. The fund, managed by Bill Gross, was 42 percent invested in mortgages last month, according to information posed on its website. It returned 9.48 percent over the past year to beat 93 percent of competitors, according to data compiled by Bloomberg.

Before Pimco, Simon was at Bear Stearns Cos., where he was co-head of pass-through mortgage bond trading.

Michael Cudzil, who joined Pimco from Nomura Securities International last year, will replace Simon as the co-manager of two mortgage-related funds, the Pimco GNMA Fund and Pimco Mortgage-Backed Securities Fund, according to a regulatory filing by the firm. Cudzil will run the funds along with Daniel Hyman, who is currently listed as a co-manager of the funds on Pimco’s website.

Dan Tarman, a spokesman, didn’t return an e-mail seeking comment.

To contact the reporter on this story: Jody Shenn in New York at jshenn@bloomberg.net

To contact the editor responsible for this story Alan Goldstein at agoldstein5@bloomberg.net

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