Monday, March 14, 2016

Giant Norwegian Fund Breaks Up With PIMCO

Scoopage from the Financial Times, March 13:

Norwegian oil fund dumps Pimco and BTG Pactual
Norway’s $830bn oil fund has severed ties with Pimco, the bond house, and BTG Pactual, the Brazilian bank, as part of an overhaul of how the world’s largest sovereign wealth fund is run.
The oil fund, which is considered one of the world’s most prestigious investors and which has become a prized client for big asset management companies, has invested with Pimco since at least 2013.

The sovereign fund pulled its money from the Californian bond house last year after widespread investor fears took hold about underperformance at some of Pimco’s largest fixed income funds and the acrimonious departure of its founder, Bill Gross, in late 2014.

The divestment is a further blow for the Newport Beach-based asset manager, which suffered €125bn of outflows from investors last year. The level of money from external clients fell 6 per cent last year, to €987bn. Pimco declined to comment on the oil fund’s departure.
The withdrawal could prompt other sovereign funds to reassess whether to hold money with Pimco. 
Amin Rajan, chief executive of Create Research, the asset management consultancy, said: “Losing a mandate from an iconic investor like the Norwegian oil fund is like losing the main feather in your cap. It will raise many eyebrows among other sovereign wealth funds.”...MORE