Pimco Names Bernanke, Brown, Trichet to Global Advisory Boardby
Panel will meet several times a year to advise firm on finance
Includes former leaders from Singapore fund, State Department
Former Federal Reserve Chairman Ben Bernanke, ex-U.K. Prime Minister Gordon Brown and former European Central Bank President Jean-Claude Trichet will help lead a new Global Advisory Board for Pacific Investment Management Co.
The board, which includes Ng Kok Song, former chief investment officer of Singapore’s GIC Pte, and Anne-Marie Slaughter, an ex-director of policy planning for the U.S. State Department, will meet several times a year and will attend the annual Secular Forum where Pimco discusses the long-term economic and market outlook, the Newport Beach, California-based firm said in a statement Monday.
“The formation of the board continues our tradition of engaging outside experts to provide their perspectives to our deep team of investment professionals,” Pimco Chief Executive Officer Douglas Hodge said in the statement. Pimco declined to disclose how much the advisers are being paid.
Pimco, which oversees about $1.5 trillion, is seeking to reassure clients and fortify its ranks after the departures of chief investment officers Bill Gross and Mohamed El-Erian last year. It has hired Joachim Fels, former chief economist at Morgan Stanley, and added Gene Sperling, a former economic adviser to two U.S. presidents, and Nobel laureate Michael Spence as consultants on economic policy. Alan Greenspan, who retired in 2006 after 18 years as the head of the U.S. central bank, previously worked as a consultant to Pimco from 2007 to 2012.
It’s uncertain whether putting high-profile names on an advisory board will translate to better investment decisions, according to Michael Rosen, CIO at Angeles Investment Advisors.
“It’s possible to imagine that there’s some insight these individuals can provide,” Rosen, whose Santa Monica, California-based firm advises on more than $25 billion, said in a telephone interview. “But translating that into portfolio construction, securities selection and then performance is probably a number of steps removed. Not a negative by any stretch, but I’m not sure there’s a direct link to better performance.”
The firm’s flagship Pimco Total Return Fund has fallen to less than a third of its 2013 peak of $293 billion as clients pulled from traditional intermediate-term bond funds in expectations of higher interest rates. Outflows accelerated after the departure of Gross, who previously oversaw the fund and built it into the world’s largest mutual fund at its peak.
Bernanke, 61, who served as chair of the Fed from 2006 to 2014, will be chairman of the advisory group. He joined Pimco in April as a senior adviser, his second consulting agreement following a position at Citadel LLC, a Chicago-based hedge fund headed by Kenneth Griffin. He also works as a distinguished fellow at the Brookings Institution in Washington.
Brown, 64, was U.K. prime minister from 2007 to 2010 and served as chancellor of the exchequer from 1997 to 2007. Ng was CIO of the government of Singapore’s investment corporation from 2007 to 2013. Slaughter is president and CEO of the New America Foundation, a think tank whose board of directors includes El-Erian. She was director of policy planning for the State Department from 2009 to 2011. Trichet, 72, was ECB president from 2003 to 2011 and an adviser to the French president from 1978 to 1981.