Newport Beach-based mutual fund manager Pacific Investment Management Co. is said to have raised more than $1.5 billion to buy assets from banks looking to shore up their balance sheets.
Pimco’s Bravo fund is set to buy troubled commercial and home mortgages from banks and could investment directly in banks, according to a Bloomberg report citing unnamed sources familiar with the fund.
Bravo, short for Bank Recapitalization and Value Opportunities, still is raising money and expects to top out at $2 billion to $3 billion later this year, according to the report.
The move appears to be part of an ongoing diversification at Pimco, best known for investing in bonds.
Recent moves away from bonds have been taken as a sign that Pimco investment chiefs Bill Gross and Mohamed El-Erian believe the bond rally of the past 30 years has run its course.
In possibly the strongest signal yet, Gross recently sold all U.S. bonds from his $234 billion Pimco Total Return fund, the world’s largest mutual fund.
Pimco started its first stock fund, the Pathfinder, in April and now has $1.8 billion in investments.
A second stock fund, with a focus on emerging markets, is due in coming months.
Pimco got its start as a government bond manager then expanded to corporate bonds, currencies, commodities and, later, funds that mimic stock market indexes.
The Bravo fund is set to go after smaller lenders and community banks, according to Bloomberg.
Dan Ivascyn, a portfolio manager in Pimco’s mortgage and asset-backed securities group, and Scott Simon, head of the group, are set to led the fund.
