NYC’s Five Pension Funds Withdraw Almost $5 Billion From Pimco

By Martin Z. Braun

New York City’s five pension funds withdrew almost $5 billion from Pacific Investment Management Co. after the departure of co-founder Bill Gross, a spokesman for the city comptroller said.
Trustees for the $160 billion retirement funds for police officers, firefighters, teachers, school administrators and civil employees began pulling $4.9 billion in investments in fixed-income securities in late September because of concerns over recent organizational changes, said Eric Sumberg, a spokesman for Comptroller Scott Stringer.
Gross, who managed the word’s biggest bond fund at Pimco, left the company Sept. 26 to join Janus Capital Group Inc.
Pimco mortgage accounts valued at about $3.5 billion were terminated and the assets distributed to mortgage managers already handling investments for
the city, Sumberg said. The pensions also exited about $1.4 billion in government-bond accounts, he said.
The five funds still hold $2.4 billion in Treasury Inflation Protected Securities with Pimco, and the pensions are searching for TIPS managers, Sumberg said.
“We have been honored to invest on behalf of New York City’s teachers, firemen, police officers and other public employees for the past 27 years,” Melody Rollins, Pimco’s head of U.S. institutional client management, said in an e-mailed statement.
Investors pulled $150.2 billion from Pimco’s U.S. mutual funds last year, the worst year of client withdrawals in the history of fund management as the firm lost both of its co-chief investment officers, Gross and Mohamed El-Erian.
The Wall Street Journal reported the withdrawals by New York City’s pensions earlier today.