Newport Beach-based bond manager Pacific Investment Management Co. is set to take a loss with the collapse of investment banker Lehman Brothers Holdings Inc.
Pimco, as well as other investment companies such as Valley Forge, Penn.-based Vanguard Group Inc., could lose an estimated $86 billion from bond holdings, according to a Bloomberg story.
It isn’t immediately clear how much Pimco holds in Lehman bonds.
Lehman filed for bankruptcy protection early Monday after suffering ongoing losses from its real estate investments.
Lehman’s bonds are held in at least 12 of Pimco’s funds, including Co-Chief Investment Officer Bill Gross’s Total Return Fund, the largest bond fund with $130 billion in assets.
Investors will recover different amounts in the investment bank, depending on their ranking as a creditor.
Lehman listed $613 billion in debt versus $639 billion in assets in its bankruptcy filing.
Last week Pimco benefited from a Federal takeover of government sponsored lenders Fannie Mae and Freddie Mac, which netted the company $1.7 billion.
At a recent check, Gross’s Total Return Fund was up 3.5% on the year, ranking in the 96th percentile of his peers.
