Outflows from Pimco Likely to Continue This Year
Bill Gross in June. Reuters

Investors in asset management firm Pimco have withdrawn a record amount from its Total Return bond fund, after the abrupt exit of renowned fund manager Bill Gross from the company in September.

The Total Return fund has suffered record outflows amounting to $23.5bn (£14.5bn, €), representing more than 10% of its assets in the beginning of September.

The largest daily outflow occurred on the day of Gross's resignation from the firm. The company added that it is well positioned to meet potential redemptions, saying "short-term cash management is an area of expertise and strength at Pimco".

"Investors have shown confidence in Pimco as evidenced by significant inflows into strategies such as the Pimco Income Fund, which has seen over $6.5bn of net inflows year to date in 2014. Diversified and alternative fixed income strategies now account for more than two-thirds of Pimco's assets under management," the company said in a statement.

"As we engage our clients around the world, we are confident that the vast majority of them will continue to stand with Pimco as we demonstrate why we have earned the reputation as one of the world's premier investment managers."

Pimco, a subsidiary of the German insurer Allianz with about $2tn assets under management, has been suffering from increasing fund outflows for the last 17 months, amid management shakeup and regulatory scrutiny of its businesses.

In January, Pimco's co-chief investment officer, Mohamed El-Erian, resigned from the firm allegedly because of differences among leaders.

It was reported earlier that one of Pimco's funds was being investigated by the US Securities and Exchange Commission over alleged artificial boosting of returns.

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Analysts at Deutsche Bank earlier said the fund could suffer total withdrawals of €210bn or 20% of its assets over the next two years.

Since the beginning of the year, investors have pulled out $25bn from the Total Return Fund and $6bn from the Pimco Unconstrained Bond Fund, according to Morningstar data as of end-August.

Both were personally supervised by Gross, who also managed the Pimco Total Return ETF, the focus of a US SEC probe.