Pacific Investment Management Co. suffered a huge blow after its co-founder, Bill Gross left the company on Friday.
Investors are withdrawing their shares from the company, creating colossal losses totalled $10 billion. The amount is expected to fly up to $100 billion following more client withdrawals.
Gross, who co-founded the giant investment firm more than 4 decades ago, reportedly clashed with PIMCO's executive committee headed by Chief Executive Douglas Hodge.
Gross, known as the "Bond King," now joins asset manager Janus Capital Group and will manage its Unconstrained Bond Fund with a little less than $13 million assets. PIMCO's Total Return Fund boasts of $222 billion.
Despite the veteran investor's withdrawal from the company, Hodge remains optimistic that most of their clients will remain loyal to the company.
Pimco executives reportedly remain confident that the investment firm can still be successful because of its good performance in its funds and more money to work with.
The company currently has $2 trillion worth of assets, according to Hodge.
"While we are grateful for everything Bill contributed to building our firm and delivering value to Pimco's clients, over the course of this year it became increasingly clear that the firm's leadership and Bill have fundamental differences about how to take Pimco forward," Hodge said in a statement on Friday.
While PIMCO is still trying to stand up after the huge $100 billion blow, Competitors are seeking it as an opportunity to grab some of the PIMCO outflows.
"There is a good chance that Pimco will lose its dominant position as a fixed-income manager as assets find their way into other investment managers, thereby leveling the playing field in fixed income,'' said Gary Pollack, who helps oversee $12 billion as head of fixed-income trading in New York at Deutsche Bank AG's DBK, private wealth-management unit.
Another Investment Firm, DoubleLine Capital, had its biggest inflow this year on Fri. amassing "hundreds of millions of dollars," according to Jeffrey Gundlach, DoubleLine Capital Chief Executive and closest rival of Bill Gross.
