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New PIMCO Boss Manny Roman Rides to the Firm’s Rescue
Moving on from his role as CEO of British alternative-asset manager Man Group, Roman turns his attention to the troubled bond giant.
After British voters opted in June to quit the European Union, Man Group chief executive Emmanuel (Manny) Roman stressed the alternative-asset managers commitment to the U.K. But the Brexit opponent, who had proved himself by turning around London-based Man, soon announced his own departure from Europe to helm another troubled firm. Trading the City for Newport Beach, California, Roman takes over as CEO of Pacific Investment Management Co. on November 1.
The erudite Frenchmans move to $1.51 trillion PIMCO follows a tumultuous couple of years for the bond titan. Hes going into something that has had some difficulty recently, where he has the ability to shape what is going on, says Johannes Huth, London-based head of U.S. buyout giant KKR & Co.s operations for Europe, the Middle East and Africa, who has known Roman since the two attended business school together at the University of Chicago in the 1980s.
Roman, 53, is known as a deal maker and a strong, personable manager, but his interests extend well beyond finance. Describing his old friend as a Renaissance man, Huth says Roman a director of publisher Penguin Random House collects old books and modern art and knows more about wine than anyone I know. Hes also a devoted fan of Arsenal Football Club, especially its cerebral longtime manager, six-time FA Cup victor Arsène Wenger, Huth notes.
The Paris native, who steps down as CEO of $76.4 billion Man on August 31 in favor of current president Luke Ellis, could use some of compatriot Wengers winning ways in his new job. A division of German insurance giant Allianz since 2000, PIMCO has seen substantial outflows in the wake of 2014s ouster of co-founder Bill Gross, the former Bond King who is now suing the firm for at least $200 million. For example, the PIMCO Total Return Fund managed $86.8 billion as of July 30, a shadow of its $230 billion peak in early 2013.
In a world of near-zero interest rates and negative yields, all fixed-income managers are entering a challenging period.
Roman will replace Douglas Hodge, whose new role at PIMCO is senior adviser. Hes an inspired choice and a risky bet to stabilize the firm, says Donald Putnam, founder and managing partner of Grail Partners, a $15 billion investment and merchant bank based in San Francisco. Roman has public company experience, a history of disciplined restructuring and a talent for strategy and clear communication internally and externally, Putnam adds.
Being an outsider the first in such a senior post at PIMCO could work against him, Putnam reckons. But it might also help Roman to strengthen ties with Munich-based Allianz Asset Management, a victim of outflows from PIMCO, which accounts for the bulk of its 1.8 trillion ($2.03 trillion) in assets.
Roman brings plenty of trading experience to PIMCO, which built its reputation on fundamental analysis of macroeconomic trends. After earning an MBA in finance and econometrics from UChicago in 1987, he started out at Goldman Sachs International, where he spent 18 years in several roles, including co-head of European equities.
In 2005, Roman left Goldman for GLG Partners. As co-CEO of the London-based hedge fund firm, he spearheaded the 2009 takeover of Société Générale Asset Managements U.K. unit and negotiated GLGs $1.6 billion sale to Man in 2010.
Named CEO of Man in early 2013, Roman inherited a stock price that had plunged 40 percent the previous year, when the firm wrote down its GLG purchase for some $750 million. To boost capital and diversify the business, he relied mostly on acquisitions, like the 2014 takeover of Numeric Holdings, a Boston-based quantitative investment manager. During his tenure Mans assets have swelled by almost 40 percent, and its stock has climbed about 14 percent as of August 25. GLGs performance has been shaky of late, though, with most of its funds down this year.
Where will Roman take PIMCO? Miriam Sjoblom, a member of the manager research analyst team at Chicago-based Morningstar, expects to see diversification that plays to his strengths in acquisitions and hedge funds. Grails Putnam emphasizes Romans ability to foster growth within the highly idiosyncratic and incredibly talented firm while fortifying relations with Allianz. Roman may be headed for California, but Europe will be on his mind.