Unstructured Finance

UF Weekend reads – The PIMCO edition

July 28, 2012

Jenn Ablan likes to tell me that people are always writing about PIMCO and Bill Gross, the long reigning “king of bonds.” And when you think of it there’s a lot of truth to that assertion.

Gross’ mammoth $263 billion Total Return Fund gets endless coverage because–by its very size–it really is the bond market. It’s one reason why so much ink is spilled whenever the Total Return Fund has a month where investors pull more money out of the fund than put in.  And it’s why there’s so much analysis of what Gross & Co. are doing with Treasuries and mortgage-backed securities–and whether they are using lots of leverage and derivatives to boost exposures.

Then again, it’s hard to ignore Gross & Co. since the bond king and his co-partner and heir apparent, Mohamed El-Erian are on TV virtually everyday offering their views on just about anything doing with the economy.

And so this Sunday’s business section of The New York Times treats us to another big PIMCO story, but this one focusing more on El-Erian than Gross. The main thrust of Geraldine Fabrikant’s story is whether the bond market’s “new leading man” is up to the job of running PIMCO, which has more than $1.7 trillion in assets, and whether he has the same trader mentality as Gross.

It’s an interesting conceit for a story, especially for an investment firm like PIMCO, which is so identified with its founder Gross. It’s hard imagining what PIMCO will be like after Gross–much in the same way it’s hard imagining the giant hedge fund SAC Capital without its namesake and founder Steven A. Cohen, controversy and all.

I’m glad so see The New York Times start wondering what PIMCO will look like after Bill. It’s an important story given how many public pensions and individual retirement plans are invested in PIMCO funds. But ironically, Jenn (and I) began tackling this very same issue back in February in a Reuters Special Report, “Twilight of the Bond King.” And as many UF readers know, Jenn has been covering Bill and PIMCO for more than a decade and she’s certainly not done.

So by all means read the NYT’s take on PIMCO, Gross and El-Erian. But keep coming back here, @reuters and @jennablan for the continuing, ground-breaking coverage on all things PIMCO.

 

Oh, and without further ado, here is Sam Forgione and his weekend reads:

From The New York Times:

Paul Sullivan widens the playing field for how retirees can play their benefits.

Investors should pause before storming into Myanmar investments, writes Brian P. Klein.
A Silicon Valley go-getter sees the link between investing and social impact, writes Drake Bennett.
Michael Hiltzik informs us on how to cautiously court inflation.


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