Old Mutual Global Investors has terminated its contract with Pimco and shifted the management of its $272m Old Mutual Total Return Bond Fund to ex-Pimco boss Bill Gross at Janus Capital.
The Old Mutual Total Return USD Bond Fund is a sub fund of the Dublin-domiciled Old Mutual Global Investors series and is currently sub-advised by Pimco.
Gross had managed the fund for more than 12 years since its launch in April 2002. The fund’s investment objective will not change under Gross’ management.
Old Mutual Global Investors global head of distribution Warren Tonkinson says: “We have a long-standing relationship with Bill Gross and believe that clients who chose to be invested with him in the Old Mutual Total Return Bond Fund will benefit from this change. Bill has a vast amount of experience and an outstanding track record and we look forward to working with him and the team at Janus.”
The news comes after Morningstar revealed asset outflows at Pimco since Gross’ departure have been worse than expected. Pimco Total Return alone shed more than an estimated $180bn in net assets between mid-2013 and May 2015.
Total firm assets fell approximately 15 per cent from $1.88trn as of September 2014 to $1.59trn as of March 2015, Morningstar data shows.
Morningstar says, however, it continues to view Pimco with “cautious optimism”.
The report states: “While recognising Pimco’s encouraging progress in a number of areas…it’s still too soon to say whether the firm has definitely turned the corner, especially in light of uncertainties around the firm’s flows, organisational stability and future growth.
“While its fund board has seen the addition of a number of independent board members, that board now needs to prove it will act in the best interests of fund shareholders.”
In January, Gross claimed he was fired by Pimco after offering to pare back his role at the firm. He said he offered to step down from the executive committee and compensation committee and oversee closed end funds after “differences with management” over the firm’s business direction.