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PIMCO Taps McCulley as Economist; Calvert's Krumsiek to Shift Roles

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PIMCO rehired Paul McCulley to serve as a managing director and take on a new role as the group’s chief economist. McCulley, who worked for the firm from 1990 to 1992 and from 1999 to 2010, also will be a member of PIMCO’s Investment Committee and will report directly to founder and Chief Investment Officer Bill Gross.

“Paul is an experienced and respected thought leader on macroeconomic issues and central banks, and he will be an important contributor to our investment process,” Gross said in a press release.

PIMCO—which lost its then-CEO and co-CIO Mohamed El-Erian earlier this year—could benefit from both new leadership and new investor interest. The bond shop had net outflows of $5.5 billion in April, according to Morningstar, bringing year-to-date outflows to some $21 billion and 12-month outflows to $80 billion. Since El-Erian’s departure in January, PIMCO has tapped Doug Hodge as its CEO and appointed six deputy chief investment officers.

McCulley will not manage client portfolios or serve as a portfolio manager, but he will spend up to 100 days per year working in PIMCO offices around the world. The economist also plans to dedicate some time to non-PIMCO activities, namely leading the Morgan le Fay Dreams Foundation.

McCulley first joined PIMCO in 1990 as an account manager. He left two years later to become chief economist for the Americas for UBS. In 1999, he returned to PIMCO to work as a portfolio manager; he later became the head of the firm’s short-term desk and a member of the Investment Committee.

Over the past three years, the economist, 57, has been chair of the Global Society of Fellows at the Global Interdependence Center, and has published papers on monetary and central bank policy. McCulley is known for coining the term “shadow banking system” as a reference for nonbank financial intermediaries that provide similar services and had a role in the global financial crisis. He also drew attention to the concept of the “Minsky Moment,” a sudden major collapse of asset values.

“I look forward to working side by side with Bill as economic counselor and interacting with the deputy CIOs,” McCulley said in a statement. “I anticipate writing frequent scholarly essays, as well maintaining a robust calendar of speaking engagements.”

Calvert Investments Inc., a socially responsible investing mutual fund firm, says President and CEO Barbara Krumsiek will vacate these post by year-end, though she will remain chairwoman of the Calvert board.

In addition, she will become the first chairwoman of the newly created Calvert Institute, which is designed to “promote the growth of sustainable and responsible investing (SRI) through research, advocacy and fostering innovation in the field of sustainable investing,” according to a company statement. The institute will begin operations on Jan. 1.

The search for Krumsiek’s replacement as CEO will be led by Executive Vice President Bill Lester of Ameritas Holding Co., parent company of Calvert Investments. In the same statement, Lester noted that under Krumsiek’s tenure Calvert’s AUM tripled, to more than $13 billion as of April 30, while helping to bring “sustainable and responsible investment strategies” to both individual and institutional investors, particularly in 401(k)s.

Krumsiek joined Calvert in 1997 as president and CEO and has long been a leader in the SRI space. She spent three years as co-chair of the U.N. Environment Programme-Finance Initiative and also developed the Calvert Women’s Principles, a global code of corporate conduct focused on women.