2020

May 11, 2020

Organizational Changes at PIMCO

Plan sponsors may wish to consider whether this investment news has implications for the investment options in their plans. Sun Life Assurance Company of Canada purchases units of the fund listed below. The fund is established as a segregated fund in accordance with the Insurance Companies Act (Canada).

PIMCO announced in March 2020 that Ed Devlin, Managing Director and Portfolio Manager, is leaving to pursue other opportunities. Mr. Devlin is Lead Portfolio Manager for PIMCO Canada’s Core Plus strategy on Sun Life’s core platform. He is tentatively leaving the firm at the end of June 2020.

PIMCO plans to transition Mr. Devlin’s portfolio management duties to a team led by Marc Seidner, Managing Director and CIO – Non-Traditional Strategies.

The team includes David Braun, Managing Director and Portfolio Manager, and Vinayak Seshasayee, Executive Vice President and Portfolio Manager. Mr. Seshasyee is a member of PIMCO’s Canadian portfolio management team and PIMCO’s Americas Portfolio Committee.

The team will work closely with Tiffany Wilding, Executive Vice President and North America Economist. Ms. Wilding will analyze Canadian macroeconomic and policy outlook. This transition will finish by June 30, 2020.

Our View

Mr. Devlin was the portfolio manager driving the strategy’s macroeconomic calls based on the firm-wide global view. He took PIMCO’s house view and married it with the Canadian economic outlook. Mr. Seshasayee’s background in credit was a good match for Mr. Devlin’s global macroeconomics knowledge.

Mr. Devlin’s departure creates a gap that Ms. Wilding will need to partly fill. Ms. Wilding is an economist who specializes in U.S. economic monetary policy. PIMCO indicated that Ms. Wilding would look at the Canadian economy going forward.

Mr. Seidner and Mr. Braun joined the strategy for their investment experience, which totals 57 years. Similar to Ms. Wilding, they did not focus on Canada in the past. They will need to become more familiar with the Canadian bond market. They will keep their major duties in the U.S., so it is unclear how much time they will spend on Canadian strategies.

Mr. Seshasayee joined the Canadian portfolio management team in 2017. Along with Mike Kim, Vice President and Portfolio Manager, Mr. Seshasayee provides some continuity on the strategy.

Mr. Devlin’s departure is a clear loss for the strategy and the team will miss his 14 years of tenure. We take some comfort in a planned three-month transition and in the overall experience of the new team. There are no expected changes to the strategy and investment process. The lack of Canadian expertise is our most significant concern for the strategy moving forward.

We have placed the strategy on Additional Monitoring. We will monitor the team transition in Q2 2020 and the new team in the following months.

Questions?

Please contact your Sun Life Group Retirement Services representative.