Pimco Turns to Stocks, Alternative Assets

By: Dan Weil

Pimco, the bond fund management firm led by Mohamed El-Erian and Bill Gross, is taking a crack at stocks and alternative assets.

The duo expects subpar economic growth in the United States and Europe during the next few years, thanks to governments’ exploding debt burdens. They’ve dubbed this scenario the “new normal.”

The paltry returns available in bonds will send investors to other assets, El-Erian says. So Pimco has started a stock mutual fund and a division to invest in hedge funds, real estate and buyout funds.

“We are living through a remarkable time of change,” El-Erian told Bloomberg Markets. “We want to make sure we navigate the changes for our clients.” (more)