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Gross Leaves PIMCO for Janus, Will Investors Follow?

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In a surprising move to bond investors, Bill Gross, the founder of bond giant Pacific Investment Management Company (PIMCO) has resigned – sending shockwaves to the fixed income world. Gross started PIMCO in 1971. Gross is moving over to Janus Capital, a rival of PIMCO. PIMCO is a subsidiary of Germany-based Allianz. PIMCO has been under a barrage of bad news in recent times, with the exiting of then-CEO Mohamed El-Erian and the SEC’s investigation to see if PIMCO pumped up returns on its exchange-traded fund (ETF), the Pimco Total Return Exchange-Traded Fund. However, there is a level of controversy over the SEC’s investigation into PIMCO as a number of ETF experts defend the industry, such as data provider ETF.com’s CIO Dave Nadig, there are “real issues in the structure of the bond market and the pricing-service model of establishing fair value.”

Since May 2013, PIMCO has faced outflows from investors to the tune of US$ 65 billion.

A major reason why institutional investors drop mandates is key personnel changes.

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Mubadala Inches Closer to Invepar Ownership

Since the beginning of the year, Abu Dhabi-based Mubadala Investment Company has been looking at owning the distressed Brazilian infrastructure company Invepar SA for quite some time. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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KDC’s Latest Acquisition a Breath of Fresh Air

Knowlton Development Corporation (KDC) has made its latest acquisition with the purchase of Aromair Fine Fragrance Company Inc., a U.S. subsidiary of Aromair Group that specializes in air care products, from London-based Strategic Value Partners. The terms of the transaction, which was completed on November 8, were not disclosed. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Norges Bank Recommends Dropping Oil Stocks for Sovereign Fund

Norges Bank penned a letter to its Ministry of Finance recommending the removal of oil and gas stocks from the GPFG’s benchmark index. At the moment, oil and gas stocks make up roughly 6% of the wealth fund’s benchmark index, or just around 300 billion NOK. Norway’s wealth fund is a major holder of oil companies such as ExxonMobil, Chevron, BP, Total and Royal Dutch Shell. Oil and gas stocks were a major driver of positive equity returns in previous quarters.[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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