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Pimco Mortgage REIT Agrees to Slash Fee If New Fund Loses Money

Pacific Investment Management Co., seeking to raise $600 million for a fund that would invest in residential mortgages, agreed to slash its management fee should the fund suffer losses.

Pimco REIT Inc., which filed for an initial public offering in April, disclosed last week that its annual management fee would decline to 1.0 percent from 1.5 percent if the fund loses money over a one-year period. Newport Beach, California-based Pimco’s prior filings with the U.S. Securities and Exchange Commission didn’t call for any change in the fee, which is based on shareholders’ equity.