Pimco rehires 2 former executives, shoring up management after turmoil

Pacific Investment Management Co. rehired two former executives who had left amid management turmoil earlier this year, a move that bolsters the bond giant’s investment bench after the abrupt departure last month of high-profile bond manager Bill Gross.

The investment management giant said it brought back Michael Spence, a Nobel laureate, to his former role as consultant on macroeconomic affairs, and Jeremie Benet as a portfolio manager. Spence and Benet are among 20 senior managers Pimco has added this year.

Spence, a professor at the New York University Stern School of Business, had served as a consultant to Pimco on macroeconomic and global affairs for several years, but left when his contract expired in February.

Benet had worked at Pimco since 2010 but left in February to start a food truck selling croque monsieur sandwiches in Southern California. The business is expected to continue without him.

The return of both men is part of Pimco’s campaign to reassure jittery investors after a year of turmoil that began in January with the sudden departure of Mohamed El-Erian, Pimco’s chief executive who had been regarded as the successor to Gross as chief investment officer.

Gross, a Wall Street legend who managed Pimco’s flagship Total Return Fund, had been at the center of reports of internal clashes with senior managers. He also had come under fire for the under-performance of Total Return, which had trailed benchmarks by significant margins and had seen 16 straight months of outflows as nervous investors sought alternatives.

After Gross’ abrupt departure last month to take over a new fund at a smaller rival, Janus Capital Group, Pimco moved quickly to install a new management team, led by Dan Ivascyn as chief investment officer.

Outflows spiked to record levels in the wake of Gross’ departure Sept. 26 but, Pimco said, moderated as September came to a close. Fund flow data for Total Return for October is expected to be disclosed publicly next week.

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