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El-Erian to Step Down as PIMCO CEO

He will leave PIMCO in mid-March but will stay on to advise PIMCO's parent company, Allianz.

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PIMCO announced on Tuesday afternoon that CEO and co-chief investment officer Mohamed El-Erian will be stepping down from those roles and departing PIMCO in mid-March 2014. Notably, El-Erian plans to stay on as a member of parent company Allianz's International Executive Committee and to advise that firm's Board of Management on global economic and policy issues.

The impact of El-Erian's departure isn't likely to be game-changing in the short term. He has served as a lead manager on two funds until now,  PIMCO Global Advantage Strategy Bond (PGSAX) and  PIMCO Global Multi-Asset (PGMAX), but they are comparatively small funds. And if history is a guide, PIMCO will quickly promote his current comanagers to lead roles and more than likely appoint additional managers to back them up. Meanwhile, El-Erian's operational responsibilities appear to be in good hands with the promotion of COO Douglas Hodge to the CEO position. That change returns the firm to a management structure similar to the one in place prior to El-Erian's assumption of CEO duties, a hallmark of which had been successful division of labor between the CEO and PIMCO's chief investment officer, Bill Gross.

Eric Jacobson does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.