Plus, news on limited Vanguard fund reopenings, First Eagle Gold reopens, and more.
Fixed-income giant PIMCO has scored a coup in rehiring Mohamed El-Erian from Harvard endowment. El-Erian was hired by Harvard in October 2005 and took over as CEO in February 2006, after working at PIMCO for seven years. El-Erian rebuilt the university's endowment investment staff during his brief stint; the team had suffered when former head Jack Meyer left to found hedge fund Convexity Capital Management, taking 33 professionals with him. When he returns to PIMCO, El-Erian will occupy the newly created position of managing director, co-CEO (with Bill Thompson), and co-CIO (with Bill Gross). This is the first hire PIMCO has ever made directly to the managing director level.
El-Erian's return is a clear positive for PIMCO. At the time of his departure, El-Erian managed PIMCO Emerging Markets Bond
While there already has been speculation that the move is an attempt by PIMCO to solidify succession plans should Gross decide to retire in the next several years, the firm made clear that there are no plans for Gross or Thompson to step down any time in the near future.
"Neither Bill Gross nor I at this time have any plans to step down, and in fact, have just been elected by PIMCO's Managing Directors for 5-year terms in our respective roles," said Thompson in a statement.
Rather, PIMCO has said El-Erian's return adds leadership depth and aids the firm in its attempts to further globalize its staff and investment strategies. In addition, PIMCO said his return contributes to the expansion of the firm's alternative investment options, an area in which Harvard gained renown.
Vanguard to Open Funds to High Rollers
In a recent column, Vanguard chairman John Brennan announced that several of the firm's now closed funds will reopen to Flagship level clients, those with $1 million or more invested with the firm. The funds reopening on Sept. 20 are: Vanguard Explorer
Brennan hopes that these limited fund openings will "generate a modest level of share purchases to offset the redemptions that occur naturally in closed funds. (Because) it is far more tax-efficient and cost-efficient to offset a fund's daily redemptions with incoming cash from purchases rather than by selling securities." Brennan also said that the firm will continue to carefully monitor cash flows into the five funds, and would close the funds again if it felt flows became troublesome.
First Eagle Fund Reopens to Goldbugs
Arnhold and S. Bleichroeder Advisers announced the reopening of First Eagle Gold
Van Kampen Reopens Muni Funds
Van Kampen High-Yield Municipal
McMorgan to Reorganize Under MainStay Banner
New York Life Investment Management has announced a proposed reorganization of several options in its McMorgan fund lineup. The McMorgan funds will be merged, should shareholders approve, into MainStay funds with similar investment objectives and will retain the same management teams. Additionally, expenses will either remain the same or may drop modestly. Thus, the proposed reorganization shouldn't negatively impact investors of most of the funds; however, the plans do also include two fund liquidations. McMorgan Balanced