Pimco REIT Files $600 Million IPOTuesday, April 5, 2011
Newport Beach’s Pacific Investment Management Co. has filed documents with the Securities and Exchange Commission to raise $600 million in an initial public offering for a new real estate holding company.
Pimco REIT Inc., which will be managed by Pimco, was formed to sell, acquire, manage and finance residential and commercial real estate loans, debt and other assets.
In the 150-page filing, Pimco said its global strategy and resources are “better positioned to produce attractive long-term returns as compared to traditional narrowly focused real estate strategies.”
The move is the latest in a string of initiatives launched by the world’s largest bond manager to diversify its investments.
Pimco, which manages $1.2 trillion in investments for pension funds, insurers, corporations and others, started its first stock fund, the Pathfinder, a year ago. The fund now has $1.8 billion in investments.
The company plans to debut its second stock fund, with a focus on emerging markets, this year with more expected in coming years.
Pimco also announced recently that it has raised more than $1.5 billion to buy troubled commercial and home mortgages and possibly invest directly in small lenders and community banks. The fund is expected to top out at $2 billion to $3 billion raised later this year.
Bill Gross, co-chief investment officer at Pimco, recently sold all U.S. bonds from his $236.9 billion Pimco Total Return fund, the world’s largest mutual fund.
The move was a strong signal that Pimco believes the bond rally of the past 30 years has run its course.
Pimco has been diversifying for decades. It began as a government bond manager, then expanded to corporate bonds, currencies, commodities and, later, funds that mimic stock market indexes.
The company is in the process of taking over the selling of its mutual funds from its German parent Allianz SE.
Pimco is opening a brokerage for its mutual funds in New York.