- Roman to replace Douglas Hodge, who succeeded El-Erian in 2014
- After asset losses, Pimco moves to diversify beyond bonds
Pacific Investment Management Co. named Emmanuel “Manny” Roman as its next chief executive officer, replacing Douglas Hodge, who presided over a tumultuous time that included the departure of Bill Gross and a plunge in assets at the firm.
Roman, 52, has been CEO of Man Group Plc, the world’s largest publicly-traded hedge fund manager, since February 2013. He will assume his new position at Pimco, owned by German insurer Allianz SE, on Nov. 1, the Newport Beach, California-based firm said in a statement on Wednesday. Hodge will become a managing director and senior adviser.
“This could be a signal that Allianz isn’t totally happy with Pimco despite the progress seen on containing redemptions; they still have lower inflows than peers,” said Thomas Seidl, an analyst at Sanford C. Bernstein. “This is going to be more complex than managing a firm with a leaner structure, so it’s probably not going to be an easy job.”
Roman took over leadership of Man Group at a time of volatility and client withdrawals amid losses posted by one of its main funds. That experience may serve Pimco, which has suffered management upheaval and lost about 25 percent of its assets since 2013, when it oversaw $2 trillion.
Man Group, which said it had $78.6 billion in funds under management as of March 31, on Wednesday named Luke Ellis to succeed Roman. The shares fell 3.5 percent to 118 pence at 8:18 a.m. in London, bringing their decline this year to 33 percent. Allianz rose less than 0.1 percent in Frankfurt.
Pimco didn’t say how much it will pay Roman. Man Group said in a statement in May that Roman’s salary will rise 10 percent to $1.1 million this year, the first increase since 2010, and he was also awarded a $2.5 million cash bonus for last year.
Roman took the helm of Man Group following a 20 percent drop in assets since mid-2011 amid muted demand for investment products. Assets rebounded under his tenure, thanks in part to acquisitions including Newsmith’s equities management business and Pine Grove Asset Management.
Hodge, 58, was appointed CEO following the abrupt departure in January 2014 of Mohamed El-Erian. In September 2014, Gross, who co-founded the firm in 1971 and built Pimco Total Return Fund into the world’s largest mutual fund, jumped to Janus Capital Group Inc. following a dispute with other managers.
Gross, 72, sued Pimco last year, alleging he was pushed out so rivals at the firm could divide his bonus. He also said they wanted to diversify beyond Pimco’s debt-trading roots, a strategy Gross’s lawsuit compared to the “varied menu at a Cheesecake Factory restaurant” instead of the traditional “bonds and burgers” niche.
Pimco, under pressure to improve operations and reverse outflows, began recruiting senior executives this year for positions that would bolster its leadership. The firm cut 68 jobs or about 3 percent of its workforce in June, after reducing staff about 5 percent to 2,300 during the year through March. It has also hired 140 employees globally, in positions from portfolio management to business development.
Allianz earlier this year hired Jacqueline Hunt, who previously headed Prudential Plc’s U.K. and European division, to lead its asset-management and U.S. life-insurance divisions. She is overseeing a turnaround plan at Pimco that includes cost cuts and the closing of some funds.