PIMCO Rehires Two Staff as Post-Gross Rebuild Continues

PIMCO has re-hired two senior staff as it seeks to rebuild and reassure clients after the departure of co-founder Bill Gross last month.

The duo have spent just months away from the Newport Beach, California-based asset manager.

Michael Spence, who won the Nobel Prize for Economics in 2001, has joined as a consultant on “macroeconomic and global policy issues”, the fund management company said. He initially departed in February after “a number of years” with PIMCO in a similar consulting role.

Jeremie Banet has returned to the group just four months after leaving to pursue a career outside of investments, according to Bloomberg. He will become an executive vice president and a portfolio manager on real return strategies. Reporting to CIO Mihir Worah, he will manage inflation protection strategies.

Want the latest institutional investment industry news and insights? Sign up for CIO newsletters. 

Even before Gross’ shock departure on September 26, PIMCO was re-hiring senior staff in an effort to steady the ship following Co-CIO Mohamed El-Erian’s exit in January. Paul McCulley was brought in as chief economist in May and Sudi Mariappa was appointed as a fund manager at the start of 2014.

PIMCO also announced the hire of former hedge fund manager Geraldine Sundstrom in June. Sundstrom will join the group in the new year to work in its multi-asset team.

Related Content:Bill Gross: Why I Left PIMCO & The High School Breakup

Defined benefit corporate pension funds in the UK have taken their foot off the risk-reduction pedal in 2014, as funding levels have improved and the country’s economy has strengthened its recovery.

The annual Purple Book, published today by the UK’s Pensions Regulator and Pension Protection Fund (PPF), showed for only the second time in nine years that institutional investors had lowered their allocations to fixed income—from 44.8% last year to 44.1% in 2014.

At the same time, investors pulled back on discarding equity holdings—a trend that had been prevalent since the onset of the financial crisis—as the UK economy has seemingly recovered.

“The Purple Book has shown a slowdown in de-risking, demonstrating that the steady decline has levelled off and could point to the end of a long-term trend,” said Andrew McKinnon, the PPF’s CFO.

Never miss a story — sign up for CIO newsletters to stay up-to-date on the latest institutional investment industry news. 

The PPF acts as a lifeboat for defined benefit pension funds attached to bankrupt companies in the UK. It monitors the health of the nation’s pensions and applies a levy to those who may end up relying upon it.

The Purple Book revealed funding levels in the UK corporate pension sector had improved from 84% in 2013 to 97% this year. On a full buy-out basis, however, this level was a great deal less, although it had improved from 61% to 67% over the past year.

“Whilst there has been a marked improvement in scheme funding, risks do still remain and we are confident that our funding strategy continues to be appropriate to ensure the protection of our members,” said McKinnon.

More detailed data published by the PPF and regulator showed schemes that carried out a bespoke stress test reported lower investment risk year-on-year.

Asset allocation reports showed that, for the first time in nine years, overseas equity holdings were more than double those held in UK securities.

The PPF invests the assets it collects from schemes it takes on from bankrupt companies along with the levy payments collected from eligible schemes. It intends to be self-sufficient and demand no further levy payments by 2030.

For an in depth look at de-risking—or lack of it—sign up for CIO’s latest edition, published November 10.