The result of the surprising departure of Mohamed El-Erian from Pimco, followed by the stunning exit of Bill Gross: the largest outflow by any mutual fund firm in history. The final tally was $150 billion, The Wall Street Journal reports (subscription required), with almost 70% from the Pimco Total Return fund. December saw a $26.7 billion outflow, more than double the amount in November but less than the nearly $50 billion in October, the month after Gross left.
Pimco mutual fund assets now stand at $378 billion, down 26.7% in 2014, and total AUM is $1.87 trillion. So while the $150 billion hit is historic, you have to be very big to see those types of outflows. And while Gross may have been the highest profile fund manager (along with Fidelity’s Peter Lynch and Legg Mason’s Bill Miller), his magic touch was waning and internal reports showed significant issues, which were highlighted by El-Erian’s departure. Last year may have been a very good year for Pimco’s competitors, but the lesson learned is to not rely too much on one firm, especially if one person seems to be in control.
