Mohamed El-Erian, chief executive officer of Pacific Investment Management Co., is expanding his oversight of the firm’s Global Multi-Asset Fund, which has underperformed since it was started five years ago.
El-Erian, who is Pimco’s co-chief investment officer along with Bill Gross, will select investments for the $3 billion fund effective at the end of this month, in addition to his current role providing strategic guidance, said a person familiar with the change who asked not to be identified because the information is private. Saumil Parikh will no longer be co-manager of the fund, according to a filing today by the Newport Beach, California-based firm.
The Global Multi-Asset Fund, opened in October 2008 to put to work the principles outlined in El-Erian’s book “When Markets Collide: Investment Strategies for the Age of the Global Economy,” invests in Pimco funds as well as stocks, bonds, commodities and currencies, to provide long-term absolute returns. It returned an annualized 0.4 percent in the past three years, trailing 85 percent of rivals, and fell 8 percent this year, behind 99 percent of peers, according to data compiled by Bloomberg. Co-managers Vineer Bhansali and Curtis Mewbourne will stay in their roles, according to the filing.
El-Erian, 55, and Gross, 69, whose name is synonymous with fixed-income investing, have sought to expand Pimco beyond bonds to stocks, exchange-traded funds and alternatives such as hedge funds. Gross’s $248 billion Total Return Fund is on track to have its highest redemptions ever this year and Pimco had firmwide net withdrawals of $39 billion in the third quarter. Mark Porterfield, a spokesman for Pimco, declined to comment on the fund changes.
Pimco will add internal and external resources for the fund managers, such as fund-analysis tools, to help boost performance, according to the person. Parikh, who focuses on asset allocation, multisector fixed income and absolute-return portfolios, will continue to manage bond investments and lead the firm’s quarterly cyclical forums, the person said.