Bond investing powerhouse Pimco named Harvard investment chief Mohamed El-Erian its co-CEO.
The Newport Beach, Calif., firm said the 49-year-old El-Erian will join CEO Bill Thompson and founder Bill Gross on Pimco's senior management team. Pimco said neither Gross, who manages Pimco Total Return, the world's largest bond fund, nor Thompson planned to step aside.
El-Erian had run Harvard's endowment, the world's largest university investment pool, since October 2005. The fund reportedly has nearly $35 billion under management following a volatile summer that saw El-Erian's diversified approach cushion the blows the portfolio took when hedge fund Sowood Capital collapsed.
Previously he was a managing director and senior portfolio manager at Pimco.
"Mohamed's return to Pimco creates a powerful and experienced leadership triangle at the most senior level of our firm," Thompson said. "We welcome him home as a proven leader, an exceptional investor and one of the most respected names in the investment world."
The news comes as Gross, whose fund has been lagging behind industry peers and its benchmark performance measures after years of strong gains, grabbed headlines by calling for a government bailout of homeowners in danger of foreclosure. Some skeptics charged Gross' comments were influenced by his portfolio holdings, which include bonds issued by
-- the government-sponsored mortgage investors that are seen as probable beneficiaries of any bailout.