Wall Street was stunned when Mohamed A. El-Erian announced last month that he would step down as chief executive and co-chief investment officer of Pimco, the giant asset manager where he was considered the heir apparent.
But on Wednesday, Pimco appeared to be already moving on.
“Believe me when I say, we are a better team at this moment than we were before,” William H. Gross, the company’s founder and co-chief investment officer, said in his latest investment outlook note.
Mr. El-Erian, a public face of the company who would frequently appear on television to opine on markets, is departing at a challenging time for Pimco. The company’s bond funds have struggled over the last year in the face of rising interest rates and falling bond prices. Investors in the firm’s Total Return Fund pulled out more than $40 billion last year.
The withdrawals from that fund continued in January, with investors taking out $3.5 billion, according to Morningstar, for the ninth-straight month of outflows.
Mr. Gross told Bloomberg News last month that he was disappointed when Mr. El-Erian told him he wanted to leave. “From our standpoint he was doing a great job,” Mr. Gross told the news service. “The answer we gave him was basically, ‘Hell no, you can’t go.’”
In the note on Wednesday, Mr. Gross urged investors to “stick with Pimco.”
The company reshuffled its leadership when it announced Mr. El-Erian’s departure, elevating two portfolio managers, Andrew Balls and Daniel Ivascyn, to become deputy chief investment officers and promoting the chief operating officer, Douglas M. Hodge, to chief executive.
Pimco announced more changes the following week, naming four additional deputy chief investment officers: Mark Kiesel, Virginie Maisonneuve, Scott Mather and Mihir Worah. The six will report to Mr. Gross. Mr. El-Erian is due to leave the company in March.
The word of the month at Pimco is “careful,” Mr. Gross said in the note on Wednesday. With credit growth slowing and the Federal Reserve reducing its extraordinary stimulus measures, economic growth in the United States may be slower than expected, he wrote.
“In any case, don’t be a pig in today’s or any day’s future asset markets,” he said. “The days of getting rich quickly are over, and the days of getting rich slowly may be as well.”