1. Business

Florida pension fund cuts PIMCO exposure

Published Oct. 8, 2014

More bad news for PIMCO.

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Mackee said that Blackrock would also be one of several other money managers receiving the separate account money withdrawn from PIMCO.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

After the abrupt departure of Gross last month, the fund said that it would continue to assess the PIMCO mandate.

Pulling the funds is a blow to PIMCO and its new group chief investment officer, Daniel Ivascyn. He and other PIMCO executives have been working to retain disaffected clients.

Analysts think that the bulk of the record $25.3 billion outflows for PIMCO's flagship Total Return Fund came from fast-reacting retail investors.