Pimco's McCulley to return for new role as chief economist

Pacific Investment Management Co., which runs the world's biggest bond fund, said Paul McCulley, a former money manager at the firm, will return to fill the newly created position of chief economist. Mr. McCulley, 57, will be a member of Pimco's Investment Committee and will report to Chief Investment Officer Bill Gross, according to a statement from the Newport Beach, Calif.-based firm. Mr. McCulley, who was the head of Pimco's short-term desk and left in 2010, won't manage any money in his new role. “During his previous years at Pimco, he played an instrumental role in anticipating and understanding economic dynamics that led to the global financial crisis,” Mr. Gross said in Tuesday's statement. “Our clients will benefit from Paul's tremendous knowledge as we identify and capitalize on opportunities in Pimco's New Neutral.” (Don't miss: Gross' new heir apparent post-El-Erian) The “new neutral” is Pimco's new outlook for the next three to five years, outlined this month, which is characterized by global growth converging toward lower, more stable speeds and interest rates that remain stuck below their pre-crisis equilibrium. This is Mr. McCulley's third stint at Pimco, which was co- founded in 1971 by Mr. Gross. Best known for his analysis and monthly commentaries on central banks and monetary policy, Mr. McCulley first joined Pimco in 1990 as an account manager. He left two years later for UBS Warburg, a unit of Zurich-based UBS AG, where he served as chief economist for the Americas. He returned to Pimco in 1999 as a portfolio manager and left in 2010 after 27 years in money management to join a think tank. Pimco has overhauled its management team following the abrupt resignation earlier this year of former Chief Executive Officer Mohamed El-Erian. Pimco has named six deputy chief investment officers in the biggest leadership shakeup in its history. (More: Pimco gets support from CEO of parent Allianz) (Bloomberg News)