Pacific Investment Management Company (PIMCO) is a global investment management firm headquartered in California with over $1.97 trillion assets under management. PIMCO offers a variety of investment strategies across asset classes including fixed income, cash management, equities, real assets, currencies, alternatives, and asset allocation. PIMCO serves a wide range of clients including pension plans, endowments, central banks, and individuals. The firm was founded in 1971 and acquired by Allianz SE in 2000 but continues to operate autonomously.

1. 1
Report on
PIMCO
Pacific Investment Management Company

2. 2
Principle of Banking & Insurance
FIN-3337
Prepared for
Shakila Aziz
Course Instructor
United International University
Prepared by
Shahanaj Islam (111111028)
Tasmia Binte Rafiq (111 111 231)
S.M. Saifur Rahman (111 111 248)
Juthy Roy (111 111 019)
Section: C
Date of submission
United International University

3. 3
January 7, 2014
Shakila Aziz
Assistant Professor,
Department of Business Administration,
School of Business & Economics,
United International University
Dear Madam:
Subject: Submission of assignment on Pacific Investment Management Company (PIMCO)
Here is the assignment that we assigned on the topic as per your request. The assignment has
been completed by the knowledge that we have gathered from the internet.
We are thankful to all those persons who provided us important information and gave us
valuable advices. We would be happy if you read the report and we will be trying to answer all
the questions that you have about the assignment.
We have tried our label best to complete this assignment meaningfully and correctly, as much as
possible. We do believe that our tiresome effort will help you to get ahead with this sort of
venture. In this case it will be meaningful to us. However, if you need any assistance in
interpreting this assignment please contact us.
Thanking you.
Yours obediently,
S.M. Saifur Rahman
On behalf of the group

4. 4
Contents
Sl Topic
Pg
No
1 Executive Summary 5
2 Overview of PIMCO 6
3 Global Offices 7
4 PIMCO Investment Strategy 9
5 History of PIMCO 11
6 How PIMCO Works 13
7 References 15

5. 5
Executive Summary
Pacific Investment Management Company, LLC (commonly called PIMCO), is an American
global investment firm headquartered in Newport Beach, California, in the United States, and
one of the largest active global fixed income investment managers in the world. As of September
30, 2013 it had $1.97 trillion in assets under management. It is the world’s largest bond investor.
PIMCO is a global investment management firm with over 2,000 dedicated professionals
focusing on a single mission: to manage risks and deliver returns for our clients. For four
decades, PIMCO has managed the retirement and investment assets for a wide range of investors,
including public and private pension and retirement plans, educational institutions, foundations,
endowments, corporations, financial advisors, individuals and others around the globe.
PIMCO is led by co-founder William H. Gross, (usually known as Bill Gross) who serves as Co-
Chief Investment Officer, and Mohamed A. El-Erian, the other Co-CIO and the firm's CEO.
Gross manages the Total Return Fund, the world’s largest mutual fund with assets of $242.7
billion as of June 30, 2011. Its head of European operations is Andrew Balls, the brother of the
British shadow chancellor Ed Balls.
The firm was founded in 1971, launching with $12 million of assets. Previously, PIMCO had
functioned as a unit of Pacific Life Insurance Co., managing separate accounts for that insurer's
clients. In 2000, PIMCO was acquired by Allianz SE, a large global financial services company
based in Germany, but the firm continues to operate as an autonomous subsidiary of Allianz.
PIMCO oversees investments on behalf of a wide range of clients, including millions of
retirement savers, public and private pension plans, educational institutions, central banks,
foundations and endowments, among others.

6. 6
Overview of PIMCO
PIMCO is a global investment solutions provider with more than 2,000 dedicated professionals
in 12 countries focused on a single mission: to manage risks and deliver returns for our clients.
PIMCO manage investments for a wide range of clients, including public and private pension
and retirement plans and other assets on behalf of millions of people from all walks of life
around the world and also advisors and asset managers to companies, central banks, educational
institutions, financial advisors, foundations and endowments.
PIMCO is a long-term investors and thought leaders. PIMCO’s time-tested investment
process guides both cyclical (short-term) and secular (three- to five- year) macroeconomic views
and combine those forecasts with in-depth research, security analysis and portfolio risk
management.
PIMCO focus intensely on providing superior service. From founding in 1971, PIMCO's team
of investment professionals has been dedicated to client service, allowing portfolio managers to
focus on protecting client portfolios and delivering returns.
PIMCO attract talented and passionate people driven by standards of professional excellence,
integrity, intellectual rigor and discipline.
PIMCO continue to evolve. Throughout our four decades we have been pioneers and continue
to evolve as a provider of investment solutions across all asset classes.
Firm Profile
 Headquarters in Newport Beach, California
 Founded in 1971
As of September 30, 2013
 $1.97 trillion in assets under management*
 $1.59 trillion in third party client assets
 2,478 total employees
 736 investment professionals
*Effective March 31, 2012, PIMCO began reporting the assets managed on behalf of its
parent’s affiliated companies as part of its assets under management.

7. 7
Global Offices
1. Newport Beach
PIMCO
840 Newport Center Drive, Suite 100
Newport Beach, CA 92660
2. Amsterdam
PIMCO Europe Ltd
Amsterdam Branch
Schiphol Boulevard 315, 1118 BJ
Tower A6
Schiphol, Netherlands
3. Hong Kong
PIMCO Asia Limited
24th Floor
Units 2402, 2403 & 2405
Nine Queen’s Road Central
Hong Kong
4. London
PIMCO Europe Ltd
11 Baker Street
London W1U 3AH
UK
5. Milan
PIMCO Europe Ltd - Milano branch
Sede legaleLargo Richini 6
20122 Milano
Italia
6. Munich
PIMCO Deutschland GmbH
PIMCO Europe Ltd,
Seidlstr. 24-24a
80335 München
Deutschland
7. New York
PIMCO
1633 Broadway
New York, NY 10019
8. Rio de Janeiro
PIMCO
Edifício Internacional Rio
Praia do Flamengo, 154
1o andar
Rio de Janeiro – RJ
Brasil

8. 8
9. Singapore
PIMCO Asia Pte. Ltd
(Registration No. 199804652K)
501 Orchard Road #09-03, Singapore
238880
10. Sydney
PIMCO Australia Pty. Ltd
Level 19, 363 George Street
Sydney, New South Wales 2000
Australia
11. Tokyo
Toranomon Towers Office 18F
4-1-28, Toranomon, Minato-ku
Tokyo, Japan 105-0001
12. Toronto
PIMCO Canada Corp.
199 Bay Street, Suite 2050
Commerce Court Station
13. Zurich
PIMCO (Switzerland) LLC
Dreikoenigstrasse 31a
8002 Zurich
Switzerland

9. 9
PIMCO Investment Strategy
1. Cash and Short Duration
PIMCO's short duration strategies seek to provide liquidity, principal preservation and consistent
income by investing in money market and other short maturity fixed income securities. These
strategies benefit from unique economic forecasting, close monitoring of the Federal Reserve
and fixed income expertise.
2. Fixed Income
Bonds offer investors the potential for regular income, preservation of capital, portfolio
diversification and a hedge against an economic slowdown. The range of issuers in the world's
largest securities markets offers opportunities for a broad spectrum of investors.
3. Equity
Equity strategies offer the potential for attractive long-term returns relative to other asset classes
as well as a high level of liquidity. While historically more volatile than investments in fixed
income, investments in stocks often serve as core holdings in balanced portfolios for many types
of investors.
4. Real Assets
Strategies that employ real assets aim to have either an explicit or implicit return correlation to
inflation. Real assets include inflation- linked bonds, commodities and real estate or some
combination of those assets. This can potentially enhance portfolio diversification, mitigate
inflation risk and provide more stable real (after-inflation) returns.
5. Currency
Currency strategies can provide efficient and risk-aware portfolio diversification while targeting
opportunities to exploit structural inefficiencies and valuation misalignments in global currency
markets. They can offer exposure to select developed and developing economies where favorable
economic fundamentals indicate a potential for currency appreciation.
6. Alternatives
PIMCO offers opportunistic/distressed and hedge fund strategies that seek to deliver attractive
risk adjusted returns across all market cycles, focusing on global macro, credit relative value,
volatility arbitrage and distressed mortgage and corporate credit opportunities.

10. 10
7. Asset Allocation
PIMCO's asset allocation strategies employ our proven investment process to create portfolios
positioned in key global risk factors within traditional and alternative asset classes. These
strategies seek attractive risk adjusted returns and true portfolio diversification utilizing dynamic
multi asset and risk factor solutions. These approaches may also employ a tail risk hedging
program to help protect against systemic market shocks.
List All Investment Vehicles
Investors can access PIMCO solutions and strategies through an array of vehicles that meet their
diverse guidelines and objectives.
1. Separate Accounts
2. Mutual Funds
3. Private Funds
4. ETFs
5. Collective Investment Trusts
6. Variable Insurance Trust
PIMCO Clients
PIMCO offers investment solutions tailored to specific types of investors, from individual and
institutional investors to central banks to retirement plans covering millions of people around the
world, among others. Our dedicated teams of investment professionals with deep industry
knowledge provide superior service and address the specific needs of our broad range of clients.
1. Retirement
2. Financial Institutions
3. Educational Institutions, Foundations and Not-for-Profit Organizations
4. Healthcare Organizations
5. Multiemployer Pension Plans
6. Consultants
7. Corporations
8. Public Pension Plans

11. 11
History of PIMCO
In 1966 The story of PIMCO start with Bill Podlich’s first job as a credit analyst in private
placements at Pacific Mutual downtown los Angeles.
In 1968 Ott Thompson relocates to Los Angeles to run the mortgage subsidiary of a large bank;
in several years he would be hired to replace Walter Gerken as president of PIMCO.
In 1971 PIMCO is officially incorporated with founding “troika” Bill Gross, Bill Podich and Jim
Muzzy in place. PIMCO introduces a revolutionary concept to investment world: actively
managed bond portfolios.
In1972 PIMCO moves from Los Angeles to Newport Beach, California, with parent company
Pacific Mutual Life Insurance. After several years PIMCO moves out the Pacific Mutual
building and into new space next door in order to foster the firm’s independent and
entrepreneurial spirit.
In 1973 PIMCO pioneered the three-legged stol management style Portfolio Management, Client
Servicing and Business Administration and emphasizes lean and efficient operations, a flat
management structure and no corner offices. Advisor Peter F Drucker is on of the drivers behind
the philosophy.
The Beach heads east as PIMCO lands its first Fortune 100 client. One of the largest and
wealthiest companies hires PIMCO in 1977 to manage part of its fixed income portfolio- the first
time they hire a specialist investment manager. This important win solidifiels PIMCO’s
credibility and opens doors at other major corporations.
In 1980 after almost a full decade in business, PIMCO is primarily run by its three founder Bill
Podlich , Bill Gross and Jim Muzzy termed the “hot hands” in bond management.
In the early 1980s, at the onset of a tremendous bull market in bonds, PIMCO formally becomes
an independent operating company.
“Today’s economy and financial markets are making an extended visit to the dentist’s office,”
writes Bill Gross in September 1981 in his first investment outlook. This widely read monthly
publication becomes a highly influential and sometimes market moving commentary on
economics and investing.
PIMCO officially adopts secular view that is a long term three to five year outlook to help a
consistent vision for its investment strategy. The first few secular annual forums are informal

12. discussion among PIMCO investment professionals, and in 1982, the firm formalize the
structure, introducing briefing books and outside experts.
In 1986 PIMCO begins managing StocksPLUS portable alpha strategies (equity index futures
paired with bond portfolios), capitalizing on the firm’s strength in active bond management and
efficient equity futures management.
In 1987 PIMCO begins managing global fixed income and currency investments, offering
investors exposure to a broad and diverse set of international opportunities and introduces a
mutual fund based Total Return strategy in 1987, the first in its suite of mutual funds.
Bill Thompson, formerly the chairman of Salmon Brothers Asia, becomes PIMCOS’s new CEO
in 1993 only the second CEO in the firm’s history.
In 1994 through a reverse merger of its holding company, PIMCO becomes part of a publicly
traded limited partnership (PIMCO Advisors LP) traded under the NYSE symbol PA.
PIMCO expands into Asia-Pacific with the Singapore office first, which opens in 1996 and
expands into Europe with the London office first, which opens in 1997. In the same year PIMCO
becomes one of the first investment managers to embrace Treasury Inflation-Protected
Securities, and in the same year the firm begins to manage emerging markets bonds and
municipal bonds, vastly expanding the range of asset classes and strategies on offer.
The marriage between German insurer Allianz and PIMCO in 2000 creates the world’s sixths-largest
investment management group. This positions PIMCO significantly expands its Europe
12
and global market presence, while continue to operate independently.
In 2003 PIMCO introduces REIT investment management strategies, offerings efficient exposure
to the commercial real estate markets.
In 2006 PIMCO’s mission to preserve and grow client asset while providing industry-lending
service earns the trust of over half of the largest companies in America.
In 2010 PIMCO’s expansion into actively managed equity strategies continues the firm’s
evolution aimed at the helping clients meet their investment objectives across all asset classes
and risk exposures.
.

13. 13
How PIMCO Works
Firstly, does Bill Gross pay himself, or is he “paid by the parent company that bought his firm”?
We haven’t seen a lot of reporting on this, but everything we know about PIMCO that it’s a very
arm’s-length, largely independent unit of Allianz. It certainly dividends profits up to its parent,
but we don’t actually believe nor have ever seen it reported that Allianz executives make
granular decisions on how much Bill Gross, or any other PIMCO employee, gets paid on a year-to-
year basis.
Is there a formula governing Gross’s remuneration, based on some combination of PIMCO
revenues, PIMCO profits, and the performance of the funds he manages? We are sure there is.
And if you want to reverse-engineer a way for Gross to have been paid $200 million in 2011
despite massively underperforming that year, then that’s surely the way to get there. PIMCO
doesn’t want to encourage short-term gambling among its employees, and so its pay is based on
long-term performance rather than year-to-year fluctuations; Gross’s long-term performance
remains excellent, and he manages an astonishing amount of money. And on top of that, PIMCO
is attracting spectacular inflows these days.
Still, PIMCO told that the numbers in the original NYT article were “seriously inaccurate”, and I
quite sure that Gross, given his position in the company, does have a certain amount of discretion
when it comes to divvying up the remuneration pool. He might not “have to answer to congress
or a goofball parade of Occupy Wall Streeters”, but he’s still a leader and even if we don’t know
for sure how much he got paid, a lot of big-time money managers in the company know exactly
what example he is setting. If they would risk getting fired after turning in such dismal
performance, then it would be downright hypocritical and bad for the cohesion of the senior
management team were Gross to accept a $200 million paycheck in such a bad year.
And how about the people whose money PIMCO is managing? Yes, it’s easy to say that they’re
sophisticated investors who “pay an agreed upon and transparent management fee up front” but
that doesn’t mean they’re happy with the fees they’re paying, especially not if they start reading
about $200 million paychecks. And in a world moving swiftly away from the fund model and
toward the lower-fee ETF model, it behooves any long-only money manager to keep a very close
eye on fees and costs. The level of money-skimming which maximizes your payday this year is
not necessarily the best way to keep on building your company’s franchise over the long term,
especially in a world where index investing is becoming increasingly popular.
As for the assertion that long-only “buy siders that actually run portfolios north of 200 billion are
paid at this level” well, name some names. It’s a very short list, of course. But if you can find
one or two other people who were paid $200 million a year for managing funds, and who weren’t
hedge-fund managers collecting 2-and-20, then I’d be much more likely to believe that Gross is
paid that much, too.
Next comes up a question about Mohamed El-Erian’s tenure at Harvard Management Company.
We quoted an article about how “Mohamed was having a heart attack” while he was there,

14. because Larry Summers insisted on taking Harvard’s spare cash and investing it in an
endowment which was designed to have a virtually infinite time horizon. As a result, El-Erian’s
job when it came to liquidity management was made extremely difficult. But now we told “this
isn’t true”, on the grounds that all El-Erian needed to do was “explain” to Summers and others
“that their allocation was inappropriate”, and then sleep well at night since the “allocation was
made by Harvard officials not by Harvard Management.”
Maybe anonymous Wall Street trolls think that way, and wouldn’t worry about Harvard’s
liquidity needs even if Harvard was effectively using them as a checking account. But a
responsible money manager worries about liquidity every day, especially in a situation where
Harvard can and will ask for large sums of cash on a regular basis. In any case, our larger point
was that El-Erian can’t be blamed for liquidity problems after he left HMC, and there doesn’t
seem to be any disagreement on that front.
Then there’s the question of the degree to which El-Erian’s ubiquity in the media is a PIMCO
marketing strategy, responsible for the large increase in assets that PIMCO is seeing these days.
We knew that the answer is a simple yes but if that’s the case that has interesting implications. A
large chunk of Fabrikant’s article was based on the premise that PIMCO’s investors wanted
Gross’s bond-trading expertise, rather than El-Erian’s technocratic global-macro insights. But if
indeed El-Erian’s regular TV appearances and various op-eds are responsible for the hundreds of
billions of dollars which continue to flow into PIMCO, then it seems that there’s a lot of appetite
out there for a macro-led, rather than a trading-led, strategy.
On top of that, it’s notable that Gross, the great bond trader, has started to underperform PIMCO
as a whole, where investments are based very much on the global macroeconomic outlook.
PIMCO’s more than big enough for both Gross and El-Erian, of course. But the idea, in
Fabrikant’s piece, that PIMCO is effectively still Gross’s shop, and risks withering away were he
ever to leave that idea is pretty effectively demolished if in fact El-Erian’s media strategy is
responsible for bringing in enormous amounts of new money. Certainly El-Erian never talks
about trading strategies in such appearances.
Finally, there’s the question of Blackrock, a much bigger fund manager than PIMCO, where,
incidentally, the CEO, Larry Fink, was paid $21 million in 2011. How did Blackrock grow so
big? In large part by buying a lot of index funds, thereby diversifying into one of the fastest-growing
investment strategies in the world. And also, in part, by being a public company. And so
14
there is a question, and an answer:
In order for PIMCO to effectively compete with Blackrock, will it too have to go public?
No. How that is even a question? They are a wholly owned subsidiary of a firm that is
significantly larger than Blackrock which allows them tremendously cheap financing if they need
it. Allianz’s insurance assets also provide them with 23% of their AUM. Does JP Morgan Asset
Management, SSgA, or Deutsche Bank Asset Management (all well over a trillion in AUM) need
to spin off and IPO to compete with Blackrock?

15. It wasn’t suggesting that PIMCO spin off from Allianz. But PIMCO already has “shadow
equity” which is traded among PIMCO employees; there’s no reason that it couldn’t get listed as
some kind of tracking stock. And that tracking stock could be a very valuable acquisition
currency as PIMCO seeks to diversify away from its historical core competence of actively-managed
bond funds. There are many reasons why PIMCO might well prefer to do things that
15
way, rather than asking Allianz for “tremendously cheap financing” for an acquisition.
It is sure that PIMCO gets lots of value from having Allianz assets at its core. But PIMCO is also
reported to be “seeking more independence from its parent”, and in any case we don’t think it’s
true that PIMCO is wholly owned by Allianz, which bought only 70% of the company back in
1999.
My point about Blackrock is that by having its own stock and being master of its own strategy, it
has managed to diversify, and grow, more quickly and effectively than PIMCO has. Here’s a
germane quote:
“The history of the asset-management business demonstrates time and time again that the most
successful asset-management firms are those who are dedicated to investing rather than
subsidiaries of banks and insurance companies where there can be lots of tension,” Burton
Greenwald, a fund-consultant based in Philadelphia, said in an interview. “Fund companies tend
to be entrepreneurial, while banks and insurance companies tend to be bureaucratic.”
There’s a case to be made that PIMCO has in fact thrived under Allianz’s ownership but it’s
unclear whether that’s a function of Allianz being a great owner, or whether it’s a function of the
fact that those years saw the greatest fixed-income bull market of all time. That bull market is
going to come to an end at some point. And when it does, PIMCO wants to be positioned much
more evenly across various different asset classes and strategies than it is now.
THE END
References:
en.wikipedia.org
www.nytimes.com
www.pimco.com
blogs.reuters.com
www.pimcoetfs.com