Pimco to broaden client base with new U.S. office

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Pimco plans to open a third U.S. office in either Colorado or Texas as the firm seeks to continue asset growth and broaden its client base.

Denver, Austin and Dallas are on the shortlist for the office, which will initially have about 200 employees, according to a memo seen by Bloomberg News. The majority of those employees will be new hires in areas such as technology and U.S. global wealth management. Pimco, a unit of Allianz, has more than 2,200 employees at 12 global offices. It’s based in Newport Beach, California.

“Many of our rivals in the asset management industry do not have the same resources and expansion opportunities — in fact, quite the opposite,” Pimco CEO Emmanuel “Manny” Roman said in the Feb. 26 memo, which was distributed companywide.

Pimco’s assets under management rebounded to $1.75 trillion at the end of last year from a low of $1.43 trillion as of Dec. 31, 2015. They peaked at almost $2 trillion in the first quarter of 2013, before the firm suffered massive outflows following the departure of co-founder and star money manager Bill Gross. Several firms that actively manage assets, like Pimco, have been losing market share to lower-fee index-based money managers such as Vanguard and BlackRock.

All three of the cities under consideration “share the benefit of providing us with the opportunity to access great pools of talent, engage with existing clients and connect with new ones,” Roman said. He also said Patrick Feigley, Pimco’s executive vice president and head of U.S. global wealth management sales, will head the new U.S. office.

Some of Pimco’s biggest rivals have already set up shop in the three cities. Dimensional Fund Advisors moved its headquarters to Austin in 2008 from Santa Monica, California. Janus Henderson, which is headquartered in London, has a major office in Denver. The city was the base for Janus before it combined with Henderson in 2017.

Austin has also become somewhat of a second home to Silicon Valley, earning the nickname "Silicon Hills." As well as hosting the annual South by Southwest conference, it’s home to offices for companies like Apple, Google parent Alphabet and Amazon.

Of the three cities under consideration, Austin rents are poised to be the most expensive, according to data from Jones Lang LaSalle. The Class A rate in Austin rose 14% to $44.23 per square foot in the fourth quarter of 2017 from the same period a year earlier. Total vacancy in the city has fallen to about 11%, down from 14% in 2014, and roughly 280 tenants are currently seeking a combined 8.2 million square feet of office space.

Pimco is also planning growth abroad. The company said it plans to build out its own distribution and operational team in Taiwan to directly work with clients there, according to the document. It also confirmed plans to move its offices in Brazil to Sao Paulo from Rio de Janeiro as Bloomberg News reported last month.

Bloomberg News
Asset management Operations Investment technology Emmanuel Roman Pimco Allianz Vanguard BlackRock Dimensional Fund Advisors Money Management Executive