PIMCO plans up to five more equities strategies

By Chikafumi Hodo

TOKYO (BestGrowthStock) – PIMCO, which launched its first active equities fund in April, is planning to offer four of five more new global equities strategies in the next few years, an executive in the company’s equities business said on Tuesday.

PIMCO’s deep-value global equity fund, Pathfinder, has performed well and has drawn strong interest from investors, including Japanese investors, Neel Kashkari, head of PIMCO’s investment initiatives, told Reuters in an interview.

“The total strategy has under $1 billion … We are exceeding our expectations…” Kashkari told Reuters in an interview. “We are very pleased with the Pathfinder both the performance that it has achieved and attraction it has received with clients.”

Kashkari, a former Goldman Sachs banker who ran the U.S. government’s $700 billion Troubled Asset Relief Program (TARP), joined PIMCO in December.

Pacific Investment Management Company (PIMCO) is the world’s largest bond fund with $1.1 trillion in assets under management.

The Pathfinder is the first asset manager’s actively managed global equities mutual fund.

PIMCO EqS Pathfinder Fund, the U.S. domiciled fund of the strategy launched in April, had $571 million in assets under management as of June 30, PIMCO data showed.

The fund lost 7.70 percent from its inception in April to the end of June, outperforming the benchmark MSCI World index, which lost 15.45 percent, it showed.

PIMCO also has two funds available in Europe, which were launched in June.

PIMCO is also planning to launch four or five more actively managed global equities strategies in the next couple of years.

Kashkari said PIMCO was aiming to launch another equities fund that focuses on emerging markets in early 2011 and to start other global equities investment strategies, such as global income and global growth.


PIMCO’s equity fund has attracted strong interest from Japan, Kashkari said.

“It’s early but there has already been strong interest. We are very pleased by the reception in Japan,” he said.

PIMCO sees Japan as a big opportunity because of the large amount of individual savings, Kashkari said. There is $15 trillion in personal assets held by individuals in Japan but they are kept largely in low-yielding saving accounts.

“They (Japanese investors) have historically focused on the Japanese market but are increasingly open-minded in investing abroad, and that is consistent with our strategy to investing globally as well,” Kashkari said.

“So even though the Japanese economy has struggled, the Japanese people have a lot of need for our offerings and I think there will be good opportunity for us in Japan.”

PIMCO is not optimistic about the outlook for Greece, as there is a risk it could default on its massive debt, Kashkari said.

“So far what it has been announced has been what I called a bridge loan. It has bought time, but what it is bridged to? Where is the actual solution?” he said.

Kashkari said Greece has not shown concrete plans on how it would pay back its debt.

“You can roll it over. You can do bridge loan but at some point they have to be able to pay back. We haven’t yet seen a solution on that and there needs to be a solution,” he said.

(Reporting by Chikafumi Hodo; Editing by Karen Foster)

PIMCO plans up to five more equities strategies