Pimco, the once dominant bond giant run by eclectic founder Bill Gross, is planning a deeper dive into equities. The firm is looking to hire as many as 16 new equities staffers, split between senior portfolio managers, traders and analysts. The question remains, though: do you want to work there?
Certainly, there’s reason to hesitate. The Newport Beach asset management firm has suffered tens of billions of dollars in redemptions over the last year as the bond market has been neutered.
Then there’s Gross himself, who has made headlines for all the wrong reasons since the firm’s divorce from former CIO and one-time heir apparent Mohamed El-Erian. Stories have surfaced about him insisting silence on the trading floor, refusing eye contact from employees and casually referring to himself at Secretariat, among other highlights. Then there are Gross’s recent investment letters, which centered on his deceased female cat, Bob, and the erotic nature of sneezing.
That all said, there are plenty of good arguments to be made for applying to the job. Here are a few.
The burgeoning equities unit is being run by former Schroeder’s exec Virginie Maisonneuve, a newly-minted deputy chief investment officer with clout, and what appears to be a sterling reputation.
Her investment record is solid. In her nine years at Schroeder’s, her funds averaged an annualized total return of 6.7%. Her total return during that time was 74.8%, bettering the 68.7% composite average of her peers. In the five years ending in October, the Schroder International Alpha Fund she ran returned 15% annually. That’s better than 70% of rival funds, according to Bloomberg. Two other funds she helped managed annually returned 14% and 16%, respectively, over that same period.
She also seems rather patient, which is a trait not shared by all equities chiefs. "If you look at who has built sizeable platforms in equities, it takes time, 10-15 years, when people have been at it for 50 years. I want to drive equities to a very sizeable level of assets, but that's going to take time,” Maisonneuve told Reuters in a recent interview.
As for Gross, he’s never shown much of an interest in bothering with equities. He’s a bond junkie, and will likely leave Maisonneuve be. It also doesn’t hurt that, most of the time, she’ll be a continent and an ocean away from Newport Beach. As of now, Maisonneuve remains based in London, although Pimco is hiring in New York too.
The immediate negatives that are brought up concerning Pimco’s equities push are its past efforts. It tried in the 1980s but failed. It tried in the 1990s with similar results. Pimco then rebooted in 2010 under Maisonneuve’s predecessor, Neel Kashkari, and achieved moderate success. It’s oldest equities fund – a traditional long/short model – is in the top-quartile of performers, according to Reuters.
But for the first time in 30 years, Pimco likely views equities as less of a side project and more as a necessity. It’s been found out as being “disproportionately exposed to fixed-income investments.”
Judging by Maisonneuve’s words, but more so the current state of the bond market, this doesn’t seem like a temporary rush to market. Previous efforts were admittedly half-hearted. This one feels different.
Many other firms that are hiring in equities trading are bulge bracket banks. Goldman Sachs, Morgan Stanley and UBS have prioritized their equities units as their fixed income operations have suffered right along with Pimco’s. But, unlike big banks, Pimco doesn’t need to bother with all the red tape and regulations around trading and pay. There are unique freedoms to working on the buy-side, and few other asset management firms are hiring as aggressively as Pimco.
Yes, Pimco’s equities funds account for just a slice of the firm’s $1.94 trillion in assets under management, but there’s still $9.1 billion to play with, and that number should be rising. The equities team will be set up like a boutique, with a staff of around 30, though it will have the backing of a monster asset management firm that needs its help.
One of the most frustrating aspects of finding work at asset managers is the physical act of getting your resume in the hands of people who are actually hiring. Most funds rarely advertise and typically hire off lists of people whom they know.
Maisonneuve, meanwhile, has hired a headhunting firm, suggesting she’s open to fresh names. Better yet, she told Reuters that she's been accepting applications directly through her LinkedIn account. Judging by her past, she has no problem with the aggressive approach to job seeking.
To secure her first investing job, Maisonneuve wrote an unsolicited letter to the chairman of Martin Currie, a man she had never met before, according to a profile in Money Marketing. Maisonneuve did the same exact thing years later to introduce herself to an American firm, Batterymarch, which eventually hired her to run a fund. The blueprint is there.
Her favorite band is Queen, by the way, if that helps with the introduction.