Is TCW Set To Become A Ghost Town?
Remember this org chart?
Now chop off 40 people, or about 30%, of the headcount. This is a little less than TCW has lost in AUM in its Total Return Bond Fund since it told Gundlach to take a hike. Will TCW's arrogance end up costing it not just an ever increasing number of people, but virtually all of its assets? With Gundlach already up and running, and Oaktree as an investor, it is likely that ever more investors will realize that the strategic mix of the two credit titans, who only lag "4th branch of government" PIMCO on the west coast, will be a far better proposition than giving their money to the unproven pro-cyclical Metropolitan West replacements and an organization in turmoil.
And speaking of the 4th branch, earlier it was announced that PIMCO managing director, derivatives specialist and member of the firm's investment committee, Changhong Zhu is leaving the firm to become CIO of Chinese sovereign wealth fund: the State Administration of Foreign Exchange. So with PIMCO having already offloaded its MBS crap to the Fed, now it just needs to jettison its Treasuries. And what better way than to land its own insider in the natural buyer of US-denominated toilet paper. Well played Mr. Gross. Well played.