Big investor pulls nearly $5B from Pimco, cites organizational changes

New York City Retirement Systems terminated two Pimco bond strategies totaling $4.9 billion due to “concerns over recent organizational changes,” said Eric Sumberg, a spokesman for New York City Comptroller Scott Stringer, fiduciary for the five public pension funds that make up the $158.7 billion pension system. (More: 2014 worst year for redemptions at Pimco Total Return) Mr. Sumberg said in an e-mail that the money was “transitioned out” of the accounts managed by Pacific Investment Management Co. effective at the end of December. “The Pimco mortgage accounts, valued at approximately $3.5 billion, were terminated and the assets distributed to the (pension) systems' existing mortgage-sector managers,” Mr. Sumberg wrote. “The Pimco government accounts, valued at approximately $1.4 billion, were also terminated and transitioned to existing government-sector managers.” Mr. Sumberg wrote that the Pimco mortgage account money was assigned to Goldman Sachs Asset Management, Wellington Management, BlackRock, Neuberger Berman and Amundi Smith Breeden. He added that the Pimco government account money was distributed to State Street Global Investors, BlackRock and Fischer Francis Trees & Watts. (More: Pimco Total Return lags peers for second-straight year) Mr. Sumberg didn't identify the specific amounts of money transferred to each manager, and didn't provide information on how these actions affected each of the five public pension funds that make up the city pension system. Mr. Sumberg added that the retirement system still holds an aggregate $2.4 billion in Treasury inflation-protected securities accounts with Pacific Investment Management Co. The pension system is “in the midst of a search for TIPS managers,” he wrote. “Any announcement regarding the TIPS portfolio will be made after the full RFP process has been completed.” Robert Steyer is a reporter at sister publication Pensions & Investments.