Being home to the world’s largest bond investor has produced a ripple effect in Orange County.
Newport Beach-based Pacific Investment Management Co. draws global attention with more than $1 trillion in assets and a track record of top returns on its funds. The reputation gets polished with Co-Chief Investment Officer Bill Gross, known as the “Bond King,” and Chief Executive Mohamed El-Erian, a well-established heir apparent.
Pimco also has produced a roster of investment managers who have moved on to establish funds of their own in OC.
John Brynjolfsson spent 19 years at Pimco before launching his hedge fund, Armored Wolf LLC. The firm manages $744 million in assets and has 20 employees, with half serving as portfolio managers. The firm recently moved its headquarters to Irvine from Aliso Viejo.
Brynjolfsson said his stay at Pimco was a “tremendous experience, an important building block in my career.”
He started his own firm in 2008, which “proved to be obviously the most challenging time ever to raise assets,” he said. “However, it was a great time to launch a firm, because the resources made available to us were unparalleled in terms of talent and interest.”
Other Alum
Armored Wolf isn’t alone when it comes to a Pimco pedigree. SW Asset Management LLC in Newport Beach and San Juan Capistrano-based Rimrock Capital Management LLC are other local examples of investment firms launched by Pimco veterans.
They vary in size and specialties.
Armored Wolf zeroes in mainly on macroeconomic factors, such as inflation and deflation. Strategies include allocations to commodities and inflation-linked bonds, which tracks with Brynjolfsson’s background. He oversaw the launch of Pimco’s Real Return fund, which is made up mostly of inflation-indexed bonds and now has roughly $24.56 billion in assets. He also co-edited the Handbook of Inflation-Indexed Bonds with financial expert Frank Fabozzi in the late 1990s.
“That helped cement my reputation—maybe as a nerd, but also as an expert in the area of inflation-linked bonds,” Brynjolfsson said.
Armored Wolf has tapped into Pimco for more talent, too.
Mohan Phansalkar, former chief legal officer at Pimco, is a managing director at Armored Wolf.
Mitch Wilner joined as a managing director about a year ago, after spending five years at Pimco as a high-yield trader and a co-portfolio manager.
SW Asset Management LLC also got started amid the recent recession. It was formed in 2009 by partners who aimed to tap into emerging-market corporate bonds, an area that its managing partners describe as underrepresented.
SW began with $2 million in capital and has grown total assets to $183 million. It also advises on a number of mutual funds for San Francisco-based Forward Management LLC.
Emerging-market corporate bonds generally bring higher yields and are deemed riskier than emerging-market sovereign debt and commodities.
SW cofounder and Chief Investment Officer David Hinman spent 10 years at Pimco, where he oversaw credit-oriented portfolios and public funds, such as Pimco Corporate & Income Opportunity fund.
SW’s Chief Financial Officer Robert Venable spent about eight years at Pimco.
John Brynjolfsson has thought about changing his firm’s rather aggressive name, and even hired a consultant to consider a new one.
He keeps coming back to “Armored Wolf,” which is “highly appealing among males between 40 and 60 years old,” he said.
It’s also a nod to Brynjolfsson’s family name and Icelandic heritage.
“Brynj” in Icelandic means “coat of mail” or “armor,” and “úlfur” means “wolf,” according to Thórhallur Eythórsson, linguistics professor at University of Iceland.
Rimrock is relatively older, going back to 1999. It was founded by David Edington, who was at Pimco when it had just a handful of portfolio managers.
Rimrock’s Chief Executive Paul Westhead also lists Pimco on his resume.
Rimrock, with $2 billion in management, focuses on fixed-income investments and taps into multiple sectors, ranging from high-yield corporate debt to distressed mortgage funds.
Not all Pimco alumni are fund managers.
James Ward spent 15 years in human resources for Pimco before taking a job as managing director at the Newport Beach office of New York-based Options Group.
“I was global head of human resources there. I joined at the end of 1994, right before they spun out from [Pacific Life Insurance Co.], back in the early days.”
Ward now heads Options Group’s human-resources consulting division, dubbed “HR-Squared.”
The company provides global executive search and other consulting services for financial companies.
Ward had previously worked for New York-based Salomon Brothers Inc. and lived in Asia for seven years, overseeing the firm’s Tokyo and Hong Kong offices. That’s where he met Bill Thompson, then-chairman of Salomon Brothers Asia Ltd, who later went on to become chief executive of Pimco and recruited Ward.
Pimco was primarily a domestic player when Ward joined, and would soon build itself into a global institution under Thompson’s leadership, Ward said.
“I was able to use my expertise in opening offices, putting people on the ground, and putting structures in place to have employees in foreign locations,” he added. “I was able to go to Asia often, because Pimco opened offices in Singapore, Sydney, Tokyo and Hong Kong.”
Thompson retired from his post at Pimco at the end of 2008 in a planned transition that left El-Erian as the sole chief executive and co-chief investment officer, along with Gross.
Ward left Pimco in 2010 with a desire to step into consulting, and landed at Options Group.
The move wasn’t too far—Options Group’s smallish local office of five employees is no more than half a mile from Pimco’s headquarters on Newport Center Drive.
“When you look at Pimco, at the end of the day, it’s all about talent,” Ward said. “It is really instrumental in how I, so to speak, sell myself. At some point, I know I’m a part of that brand.”
