About Time
This change was nigh-on inevitable. Successful founding investors tend to be dictatorial, obsessive, and stubborn. (Demonstrating all three qualities, Dick Strong (of the now defunct Strong Capital Management) insisted when his company's headquarters was built that all screws be installed with their grooves vertically aligned, so that the screws would not gather dust.) Successful corporate managers, not so much. At $2 trillion in assets, PIMCO was long overdue for a management overhaul.
The company's structure was not only inappropriate for its size but also was bucking the spirit of the age. Time was when fund management companies run by founder/owners captured many--and sometimes most--new fund sales. Now, there's Jeff Gundlach's DoubleLine and … and well, not much. The asset winners are the giant manufacturers, churning out cheap index funds and institutional actively run funds that are high on risk controls and low on surprises.
The move would have occurred years ago had PIMCO's performance not been so strong. Most evaluations of fund-company stewardship follow the precept of "if it ain't broke, don't fix it." Organizations, naturally, are happy to oblige--the status quo being highly comfortable to those who are already in charge. The result being that little happens with fund management companies when they are riding high.
