Pimco Executive Defends Company Following Departure of Bill Gross

By Kirsten Grind and Justin Baer 

An executive at Pacific Investment Management Co. defended the company in front of hundreds of top Morgan Stanley financial advisers at a gathering in Miami on Monday, according to people familiar with the matter.

The meeting kicked off a day in which Pimco executives sought to persuade large and small investors that they should keep their money at the Newport Beach, Calif.-based asset manager, despite the departure Friday of co-founder and chief investment officer Bill Gross.

Pimco executives, including Chief Executive Douglas Hodge and the firm's new portfolio management team, hosted a string of investor calls with Wall Street firms, including Merrill Lynch, Morgan Stanley and others, according to people familiar with the matter.

A spokesman for Pimco declined to comment.

The remarks in Miami came at a gathering of about 350 Morgan Stanley advisers who were being celebrated for their work, according to people familiar with the matter. Pimco Executive Vice President Joseph Deane was on hand to lead a discussion about fixed-income markets, said these people.

Instead, Mr. Deane was asked by an adviser about how Pimco was planning to handle the departure of Mr. Gross, with the adviser saying the exit was the last straw for many Pimco investors, one person in attendance said. Mr. Deane countered by saying Pimco has the smartest people in the world working for the company, according to this person.

Pimco has suffered at least $10 billion of withdrawals, a person familiar with the matter said over the weekend, a sign of how quickly Mr. Gross's surprise move is reshaping the bond-investing landscape. Pimco has about $2 trillion in assets under management.

Pimco is bracing for more outflows on the heels of the veteran investor's departure after months of internal strife over his leadership. At the same time, some managers say they remain committed to the firm.

Write to Kirsten Grind at [e-mail] and Justin Baer at [e-mail]

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