PIMCO Is Over ‘Gross Effect’ as Break-Even Nears, Owner Says

Pacific Investment Management Co. has overcome the departure of bond trader Bill Gross and a record period of outflows from its funds may be on the verge of ending, said Munich-based Allianz SE, the company’s owner.

Pimco is planning to “get close to break-even in the third quarter,” Allianz Chief Financial Officer Dieter Wemmer said in an interview with Bloomberg TV’s Caroline Hyde on Friday. “Some days end up as an inflow, some as an outflow.”

Last year’s departure of Gross, Pimco’s co-founder, extended a record period of outflows from its funds, already battered by low interest rates and mediocre returns. Assets in the Pimco Total Return Fund, which Gross managed, have plunged to $101 billion from a high of $293 billion in April 2013.

“I think we have overcome the Bill Gross effect,” Wemmer said. “I think we are now in the tactical or strategic reallocation of monies by our customers.”