New York City Pensions Pulled $4.9 Billion From Pimco in 2014


New York City’s pension funds have pulled $4.9 billion from Pimco since Bill Gross left the firm in September.

A City spokesman confirmed that the pullout was due to “organizational change” within the firm.

From Reuters:

“The New York City Pension Funds recently transitioned out of $4.9 billion in Pimco accounts due to concerns over recent organizational changes,” Eric Sumberg, a spokesman for New York City Comptroller Scott Stringer, said in a statement.

Gross shocked bond markets in September by leaving Pimco, which he co-founded, for smaller rival Janus Capital, where he now manages the Janus Global Unconstrained Bond Fund (JUCAX.O).

The assets pulled from Pimco by the city pension funds were distributed to the city’s existing asset managers, Sumberg said.

Existing managers include BlackRock (BLK.N), Goldman Sachs (GS.N) and State Street (STT.N), among others.

According to Morningstar, the Pimco Total Return Fund, formerly managed by Gross, had record outflows of $103 billion in 2014. Investors pulled $150 billion from Pimco’s U.S. open-end mutual funds for 2014, Morningstar data also showed.

The New York pension funds still hold $2.4 billion in Treasury inflation-protected securities (TIPS) accounts with Pimco.

“At this time the Systems are in the midst of a search for TIPS mangers,” Sumberg said in the statement.

As noted above, New York’s pension funds haven’t exited Pimco entirely; they still have $2.4 billion invested with the firm.

The City’s pension funds collectively manage $158.7 billion in assets.


Photo by Tim (Timothy) Pearce via Flickr CC License

Illinois Teachers’ Fund To Stick With PIMCO, But Backup Plan Remains in Place

Flag/map of Illinois

In the weeks since Bill Gross’ departure from PIMCO, dozens of public pension funds around the country have carefully considered whether to stay with the firm or move on.

In late September, one of the largest plans in the country, the Florida Retirement Systems, announced it was cutting PIMCO in favor of BlackRock.

The Illinois Teachers’ Retirement System announced Thursday it would keep its assets with PIMCO, but would still be watching the firm closely. From Pensions & Investments:

Illinois Teachers’ Retirement System, Springfield, will not terminate any of the nine strategies managed for it by Pacific Investment Management Co., but likely will keep the company on its watchlist.

The $45.3 billion pension fund’s investment staff has had “backup portfolio managers” lined up since rumors started swirling earlier this year of the departure of William H. Gross, co-founder and former chief investment officer, said Scottie Bevill, senior investment officer for fixed income and real assets, to trustees at an investment committee meeting on Wednesday.


PIMCO manages a total of about $3 billion for the pension fund — all fixed-income, credit or global tactical asset allocation approaches — representing about 6.6% of total fund assets.

PIMCO has been on the pension fund’s watchlist for personnel changes since February, when Mohamed El-Erian, PIMCO’s former co-chief investment officer, announced he would leave the firm.

Trustees approved the proposed watchlist, with PIMCO on it, during the investment committee meeting. The full board must approve the committee’s recommendation at its Friday meeting.

Pension funds that have PIMCO on their watchlists include: the Texas Municipal Retirement System, Indiana Public Retirement System, New York City Employee Retirement System, and the Hawaii Employees’ Retirement System.

Arkansas Teacher’s Fund Fires PIMCO, Withdraws $475 Million From Firm

PIMCO's Newport Beach Office
PIMCO’s Newport Beach Office

The Arkansas Teacher Retirement System is pulling its money out of PIMCO, the fund announced today. Its investments with PIMCO had totaled $475 million.

More from Pensions & Investments:

Arkansas Teacher Retirement System, Little Rock, terminated Pacific Investment Management Co., which managed about $475 million its Total Return strategy for the pension fund, said George Hopkins, executive director.

Mr. Hopkins said the decision to terminate PIMCO was twofold. Officials at the pension had been looking to derisk the fund’s fixed-income portfolio, and the September departure of William H. Gross, PIMCO’s co-founder and chief investment officer, contributed to the decision to move out of the strategy completely.

“[Mr. Gross’] departure came at an inopportune time,” Mr. Hopkins said.

The assets will be transferred to a fixed-income index fund managed by State Street Global Advisors. State Street currently manages about $250 million in the index fund, Mr. Hopkins said.

The Arkansas Teacher Retirement System manages over $14 billion of pension assets.

Dozens of Pension Funds Are Reviewing PIMCO Investments After Bill Gross Departure

scissors cutting a one dollar bill in half

The United States’ public pension funds have tens of billions of dollars invested with PIMCO. But dozens of funds have put PIMCO on their “watch” lists – if they haven’t exited PIMCO already. From Bloomberg:

Illinois’s teacher retirement system, with $3 billion invested with Newport Beach, California-based Pimco, has had the money manager on its watch list since February, when former Chief Executive Officer Mohamed El-Erian left, according to an article published today. Texas Municipal Retirement System put Pimco on watch after Gross’s departure.

Managers of New York City’s retirement systems are reviewing $7.08 billion in Pimco investments, while those overseeing plans in Michigan, Indiana and North Dakota are monitoring the situation, according to the article.

A San Francisco city and county plan’s committee this week will hear from a consultant about $82 million invested in Pimco’s Total Return Fund. (PTTRX) A termination would mark the first time it has eliminated an offering, according to the interview with Jay Huish, the system’s executive director.

Gross, 70, who co-founded Pimco more than four decades ago, left last month for Janus Capital Group Inc. (JNS) after deputies threatened to quit and management debated his ouster. His departure prompted investors to review their Pimco holdings and triggered $23.5 billion in redemptions in September from the $201.6 billion Total Return Fund, which he previously ran.

Gross’s new Janus Global Unconstrained Bond Fund received $66.4 million in subscriptions last month, according to Morningstar Inc.

The Florida Retirement Systems, one of the largest public funds in the country, announced last week it would cut its investments with PIMCO.

Florida Pension Cuts PIMCO

palm tree

In the latest vote of non-confidence in a post-Bill Gross PIMCO, the Florida State Board of Administration (SBA), the entity that manages investments for the Florida Retirement Systems, has announced it will drastically cut its investments with PIMCO.

From the New York Times:

The investment body overseeing the state of Florida’s retirement system said Tuesday that it would be sharply curtailing the funds that it has allocated to the shaken bond giant.

In a statement, Dennis Mackee, a spokesman for the $147 billion pension fund, said that $1.9 billion in assets managed by PIMCO as a separate investment account for Florida would be “significantly reduced.”

Mackee also said that Florida’s investment plan would be terminating PIMCO’s Total Return Fund and its Inflation Response Multi-Asset Strategy Fund. Together, the funds managed just over $1 billion for Florida retirees.

Adding insult to injury, Mackee said that this money would be steered toward two funds belonging to PIMCO’s archrival, BlackRock.

Mackee said that Blackrock would also be one of several other money managers receiving the separate account money withdrawn from PIMCO.

As with many state retirement funds, Florida had put PIMCO on its watch list after reports that its two leaders, Bill Gross and Mohamed El-Erian, were feuding.

The Florida Retirement System is one of the largest public pension funds in the United States. It manages $147 billion.

Pension Funds React, Weigh Next Move After Bond Guru’s Departure From PIMCO

Bill Gross, bond guru and co-founder of investment management firm PIMCO, has left the company. Gross’ is only the latest in a string of high-level departures from the firm.

Some wealth managers had exited PIMCO earlier this year after sensing that the “team was falling apart.”

But how are pension funds reacting?

Here’s CalPERS’ take, from Bloomberg:

The California Public Employees Retirement System, the largest U.S. pension, said it doesn’t have plans to change its investments with Pimco, according to an e-mailed statement today.

“Calpers has respect for both Bill Gross and Pimco investment professionals,” the pension system said. Calpers, which has about 1.5 percent, or $1 billion, of its fixed-income assets in a Pimco international bond fund.

New Mexico PERS isn’t ready to make any decisions, either. But the Florida SBA, the entity that manages investments for the state’s pension funds, is watching PIMCO closely. Bloomberg reports:

Jon Grabel, chief investment officer of the Public Employees Retirement Association of New Mexico, said it’s too early to make a decision about moving assets. Pimco manages about $725 million for the association in a separate account, Grabel said.

“One person may get the headlines, but one person doesn’t manage trillions of dollars,” he said.

The Florida State Board of Administration, which manages $147 billion in its Florida Retirement System Pension Plan, has been monitoring Pimco since El-Erian left. The fund has $1.9 billion invested in Pimco and nothing in Janus, said Dennis MacKee, a spokesman for the pension.

Pimco is on the system’s watch list, which isn’t a precursor to redemption, MacKee said. It means the board is looking closely at the funds’ performance and operations and will meet with consultants and investment staff to decide what to do, he said.

New York’s Common Fund and Indiana PERS are taking a similar approach: they’ve not yet moved on from PIMCO, but have placed the firm on a ‘watch list’, reports Bloomberg:

New York City’s five pension funds are evaluating the situation at Pimco, the New York City Office of the Comptroller said in an e-mailed statement. Total assets of the funds for firefighters, police officers, teachers, school administrators and civil servants is about $160.5 billion.

The $30.2 billion Indiana Public Retirement System said Pimco remains on its watch list and it’s monitoring developments, Jennifer Dunlap, a spokeswoman for the pension fund, said in an e-mailed statement. The retirement plan had put Pimco on its list in January.

Gross left PIMCO to take a job at Janus Capital Group Inc.

Gross said he wanted to take a job that allowed him to get closer to his original passion: trading bonds.