PIMCO said Monday that it has rehired Paul McCulley to serve as a managing director and take on a new role as the group’s chief economist. McCulley, who worked for the firm from 1990 to 1992 and 1999 to 2010, also will be a member of PIMCO’s Investment Committee and will report directly to founder and Chief Investment Officer Bill Gross.
“Paul is an experienced and respected thought leader on macroeconomic issues and central banks, and he will be an important contributor to our investment process,” Gross said in a press release.
PIMCO — which lost its then-CEO and co-CIO Mohamed El-Erian earlier this year — could benefit from both new leadership and new investor interest. The bond shop had net outflows of $5.5 billion last month, according to Morningstar, bringing its year-to-date outflows to some $21 billion and its 12-month outflows to $80 billion.
(Since El-Erian's departure in January, PIMCO has tapped Doug Hodge as its CEO and appointed six deputy chief investment officers.)
McCulley will not manage client portfolios or serve as a portfolio manager, but he will spend up to 100 days per year working in PIMCO offices around the world. The economist also plans to dedicate some time to non-PIMCO activities, namely leading the Morgan le Fay Dreams Foundation.
McCulley first joined PIMCO in 1990 as an account manager. He left two years later to become chief economist for the Americas for UBS. In 1999, he returned to PIMCO to work as a portfolio manager; he later became the head of the firm’s short-term desk and a member of the Investment Committee.
Over the past three years, the economist, 57, has been chair of the Global Society of Fellows at the Global Interdependence Center, and has published two papers on monetary and central bank policy.
McCulley is known for coining the term “shadow banking system” as a reference for nonbank financial intermediaries that provide similar services and had a role in the global financial crisis. He also drew attention to the concept of the “Minsky Moment,” a sudden major collapse of asset values.
"I look forward to working side by side with Bill as economic counselor and interacting with the deputy CIOs,” McCulley said in a statement. “I anticipate writing frequent scholarly essays, as well maintaining a robust calendar of speaking engagements. PIMCO will always be Camelot to me."