Close Close

Life Health > Life Insurance

Ex-Pimco parent, Pacific Life, switching accounts to Janus

Your article was successfully shared with the contacts you provided.

(Bloomberg) — The firm where Bill Gross made his name is showing support for his latest venture.

Pacific Life Insurance Co., the insurer where Pacific Investment Management Co. was started as a bond unit in 1971, is moving money from Gross’s old firm to the one he joined last month, Janus Capital Group Inc. Pacific Life asked the U.S. Securities and Exchange Commission for permission to move some separate accounts to Janus Aspen Series Balanced Portfolio from the Pimco Global Multi-Asset Managed Allocation Portfolio, according to filings yesterday. Gross isn’t affiliated with the Pimco accounts or the Janus Aspen Series Balanced fund.

“We continue to see a lot of assets in movement across the fixed-income industry and we believe Janus is well positioned to gather flows as a result,” Steven Shapiro, a spokesman for Denver-based Janus with Communications Strategy Group, said in an e-mail. “Our Balanced fund has excellent performance and is one of our strategies that we believe will benefit from the changing landscape in the fixed-income industry.”

Investors rattled by the 70-year-old Gross’s surprise departure are taking their money from Pimco, pulling a record $23.5 billion in September from the Total Return Fund, the world’s biggest bond fund, which he ran until his exit on Sept. 26. They’re moving money to competing funds, or parking money in money-market funds and exchange-traded funds while they reevaluate their holdings.

Mark Porterfield, a spokesman for Pimco, declined to comment on the account changes. Marisa Schaeffer, a spokeswoman for Pacific Life, didn’t provide a comment.

Pimco Ownership

After Dec. 1, Pacific Life won’t accept new allocation instructions to the Pimco portfolio, according to the filing. The substitution will occur on or about March 6.

Pimco, the Newport Beach, California-based firm that oversees $1.87 trillion, was started as a unit of the insurer previously known as Pacific Mutual Life Insurance Co.

In 1994, Pimco and four other asset managers owned by Pacific Life did a reverse merger with Thomson Advisory Group LP, in which a closely held company acquires a public company. The combined entity, Pimco Advisors LP, became publicly traded, a run that ended when Allianz SE completed its acquisition of the money manager in 2000. Gross, whose main fund at Pimco trailed peers since the beginning of 2013, left after his deputies threatened to quit and management debated his ouster, according to people familiar with the matter.

Pimco Fund

The $1.15 billion Pimco Global Multi-Asset Fund, run by Mihir Worah after his two co-managers left the fund at the end of September, returned 3.2 percent this year through Oct. 17, outperforming 89 percent of comparable funds, after losing 8.4 percent in 2013, according to data compiled by Bloomberg. The fund lost 5.2 percent in the past month, dropping to the 18th percentile against peers.

The fund, which Gross has never run, was at various times managed by former Chief Executive Officer Mohamed El-Erian and Saumil Parikh, who runs the firm’s cyclical economic forums, was added as a manager. The team shifted in January after El-Erian announced his resignation from Pimco.

Pacific Life is putting money instead into an asset-allocation strategy led by Janus’s Gibson Smith and Marc Pinto. The $1.6 billion Janus Aspen Balanced Portfolio mutual fund advanced 3 percent this year, beating 87 percent of peers. The fund surged 20 percent in 2013, outperforming 80 percent of competitors, according to data compiled by Bloomberg.

Annuity Choices

Pacific Life’s website still lists four Pimco funds as individual options through its variable annuities, including two managed by Worah. The PSF Managed Bond fund still lists Gross as a manager.

Gross’s Janus Global Unconstrained Bond Fund, which started in May, has lost 0.3 percent in the past month, outperforming 27 percent of peers, according to data compiled by Bloomberg. The fund received $66.4 million in September, according to Morningstar Inc., and had about $80 million under management at the end of September, the data show.

The market anticipated $25 billion to $50 billion in new assets at Janus after Gross joined, which may be “setting up for possible disappointment,” Citigroup Inc.’s William Katz wrote in a report to clients Oct. 3.

In a separate shuffle, Massachusetts Mutual Life Insurance Co. is replacing Pimco Total Return Bond Fund with TCW Group Inc.’s Metropolitan West Asset Management as subadviser to its MassMutual Select Total Return Bond Fund, effective Oct. 27, according to a supplement to the fund’s prospectus dated yesterday. The fund is also dropping Pimco from its name.

The $38 billion MetWest Total Return Bond Fund, managed by Tad Rivelle, Stephen Kane and Laird Landmann, has returned 5.5 percent this year, beating 67 percent of peers, according to data compiled by Bloomberg.

MassMutual’s investment portfolio stood at $126.5 billion on Dec. 31, according to its annual report.

–With assistance from Charles Stein in Boston and Margaret Collins in New York.