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PIMCO Settles Suit, Promotes Emerging-Markets Bond Skipper

Plus, equities and fixed income now under single CIO at DWS, and more.

Morningstar Analysts, 01/03/2011

PIMCO announced that it has settled a class-action lawsuit relating to the firm's trading of futures contracts in 2005. The suit involved accusations that PIMCO helped to improperly enrich its clients, but the $92 million settlement is being paid solely out of PIMCO coffers from reserves it set aside during the last three years. PIMCO funds will be unaffected, and the firm does not expect the statement will affect its future financial performance, compensation for any staff, or any future plans for growth.

Ramin Toloui will take over as lead manager of PIMCO Emerging Markets Bond PEMDX on Jan. 1. Toloui, who is a comanager with CEO Mohamed El-Erian on PIMCO Global Advantage Strategy PSAIX, will replace Curtis Mewbourne, who has managed the fund since April 2009. Mewbourne is moving to New York to oversee PIMCO's growing stable of portfolio managers there. While Mewbourne will continue running PIMCO Diversified Income PDIIX (for which he is nominated to be named Morningstar Fixed-Income Fund Manager of the Year) and PIMCO Floating Income PFIIX, his new responsibilities are forcing him to shed his role with Emerging Markets Bond.

This is a significant promotion for Toloui, who has only been with the firm since 2006. That said, he's not new to emerging markets. He currently manages about $10 billion in institutional and separate emerging-market accounts. Before joining PIMCO, Toloui worked for seven years in the U.S. Treasury, where he helped intervene in debt crises in Argentina and Turkey.

Toloui will also be the co-head of PIMCO's overall emerging-markets effort with Michael Gomez, who runs PIMCO Developing Local Markets PLMDX and PIMCO Emerging Local Bond PELBX. As indicated by their portfolio responsibilities, Toloui will focus on so-called "hard-currency" bonds (such as those denominated in the U.S. dollar, euro, or other developed currencies), while Gomez will stick mostly to local-currency debt.

DWS Brings Equities and Fixed Income Under One CIO
On Dec. 29, DWS announced changes in the firm's management that unites equities and fixed income under a single CIO.

Klaus Kaldemorgen is stepping down as equity CIO (a role he's held since 2005) to concentrate exclusively on investment management, including new absolute-return funds. He started at DWS in 1982. Asoka Woehrmann, fixed-income CIO, will retain that role and take over equity CIO responsibilities, as well.

Additionally, Wolfgang Matis will be appointed as speaker of the management board of DWS Investment GmbH and global CEO of DWS. He will report to Kevin Parker, Deutsche Asset Management's global head. (DWS is the mutual fund arm of Deutsche Asset Management.)

Finally, Ingo Gefeke--the firm's global head of distribution and product management--is stepping down from the DWS board of management and will take on a new role with Deutsche Asset Management in New York. Also, Axel Schwarzer, on the DWS board of management and vice chairman of Deutsche Asset Management, is leaving.

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