Our Firm
Pacific Investment Management Company LLC (“PIMCO,” “we,” or “us”) is a leading global investment management firm founded in Newport Beach, California in 1971, with more than 2,500 employees in offices in Newport Beach, New York, Austin, Singapore, Tokyo, London, Sydney, Munich, Zurich, Toronto, Milan, São Paulo, Hong Kong and Taipei. We are an indirect subsidiary of Allianz SE (“Allianz”), a global financial services company based in Germany, although our operations are separate from and autonomous of Allianz. Please see Appendix A for a list of PIMCO’s principal owners. PIMCO’s Global Offices. As a global investment manager PIMCO may call on the resources of our offices around the world to provide portfolio management, research and trading services for client accounts (each, a “Client” or “Account”). The PIMCO entity with which a client has contracted supervises any services provided by one or more of our global offices. Our People. PIMCO was founded on the philosophy that hard work, high standards of excellence and the desire to be the best are critical to our success. Biographical information relating to certain key investment management personnel is contained in the supplement to this brochure.
Assets Under Management
As of December 31, 2018, PIMCO managed approximately $2,197,262,953,993 of regulatory assets under management and $1,664,645,838,280 of net assets under management, respectively. For purposes of calculating our AUM, we included the assets of clients contracted with the non-U.S. investment advisers affiliated with PIMCO listed in Appendix C (the “Non-U.S. Advisers”) in addition to assets we manage on behalf of Allianz-affiliated companies. We did not include the assets of clients contracted with Gurtin Fixed Income Management, LLC (“Gurtin”), which is an affiliate and wholly-owned subsidiary of PIMCO and an investment adviser registered with the SEC. PIMCO acquired Gurtin on January 2, 2019. For more information on PIMCO’s acquisition of Gurtin, please see “New Affiliations” in Item 10.
Our Services
Our Organization. Since 1971 we have provided discretionary investment management services to clients throughout the world. PIMCO began as a manager of fixed income portfolios and has evolved to include active management of equities, open-end funds, closed-end funds (exchange listed funds and interval funds), exchange traded funds (“ETFs”), collective investment trusts (“CITs”), private investment funds (such as private equity-style funds and hedge funds) and structured products. PIMCO is a provider of solutions services, offering a menu of sophisticated strategies, analysis and advice for clients in all types of market conditions. While these services have greatly evolved over time, one thing that has not changed is our mission to provide the highest quality investment management services. As a leading provider of discretionary investment management services, PIMCO employs a broad range of portfolio management tools that seek to appropriately manage risk, hedge exposures, and seek returns consistent with Client guidelines. We have considerable experience in an array of global investment strategies, which include both fixed income and equity strategies. As markets evolve we will seek to employ new strategies and manage new products. Additional information regarding our strategies, methods of analysis, and the material risks associated with our significant strategies is included under Item 8, “Methods of Analysis, Investment Strategies and Risk of Loss.” Portfolio Management. PIMCO provides investment management services to Clients through a global team of investment professionals. The investment professionals employed by PIMCO are devoted primarily to the management of Accounts. Client portfolio management teams include portfolio managers, risk managers, research analysts, economists, and others who assist in the development of investment ideas, implementation of portfolio strategies and risk analysis. PIMCO ADV Part 2A Brochure | 2019 5 Separate Account Management. The client management team, which acts as the bridge between separate account Clients (each, a “Separate Account”) and their PIMCO portfolio managers, is devoted to client service. One of the advantages of this approach is that it permits our portfolio managers to concentrate the vast majority of their time to investment activities. Client management professionals work closely with the portfolio management team to make sure each Separate Account’s investment guidelines are implemented. Client management professionals also play an integral role in helping to develop investment ideas and strategies in conjunction with the portfolio management team. Business Management. Our business management team provides the infrastructure for the operation of the firm and includes the Legal and Compliance, Talent Management, Operations, and Technology Departments. One key function of the business management team is to manage back-office operations. We have outsourced certain back-office operations to State Street Investment Manager Solutions West and its affiliates (together, “SSIMS”), a firm specializing in back-office trade processing, settlement and accounting operations. This enables us to focus the majority of our people and resources on what we do best: managing investments and servicing clients. SSIMS administers the following functions, among others, on our behalf, including, but not limited to: (i) coordinating asset transitions; (ii) assisting with the maintenance and update of our security master database; (iii) processing trades; (iv) communicating trade and settlement directives to the relevant account’s custodian banks; and (v) facilitating failed trade and overdraft compensation claims. While SSIMS provides our back-office services, we actively supervise all work performed on behalf of our Clients in connection with these services. Non-Discretionary Services. In addition to our discretionary investment management services, we also provide non-discretionary investment management services to certain Clients and non-discretionary advisory services to private and public institutions throughout the world. Some clients may grant PIMCO limited discretion with respect to the assets in their Account (“Non-Discretionary Accounts”). For example, a Client may require that PIMCO seek the Client’s approval prior to any buy or sell transactions in the Client’s Account. In these instances our ability to transact on behalf of the Client will be limited. Therefore, a Non-Discretionary Account may not be able to obtain comparable discounts that we may negotiate on aggregated transactions, it may pay higher transaction costs or brokerage commissions, and we may be unable to achieve the most favorable execution depending on the limitations of the Account. Similarly, a Non-Discretionary Account may not be able to participate in certain investment opportunities. For these reasons, a Non-Discretionary Account may achieve lower returns compared to a comparable Account that grants PIMCO full discretion. For more information on non- discretionary Accounts, please see “Potential Conflicts Relating to Non-Discretionary Advisory Services” in Item 11. Other Services. From time to time PIMCO engages in related business activities, including licensing of intellectual property with respect to, for example, the development of methodologies for compiling and calculating a benchmark index. We may license or sell our intellectual property rights in such methodologies to third parties who may use such methodologies to create and issue investment products that are based on such indices and/or correlated to the underlying components of such indices. We may also license or sell our intellectual property rights in such methodologies to third parties who may use such methodologies to develop a benchmark index or use such methodologies to calculate performance on a financial product. Such third parties may pay us a portion of the subscription or licensing fees they receive in connection with such indices. In connection with the licensing of our indices, we may receive a fee for entering into certain hedging transactions on behalf of the licensee of the index (or another third party) or for permitting third parties to engage in such hedging transactions. Other examples of related business activities may include, among other things, entities affiliated with us or owned by certain PIMCO ADV Part 2A Brochure | 2019 6 PIMCO Funds (as defined below) providing loan servicing, consulting, legal, accounting, tax, due diligence, asset management or other services to certain Accounts or PIMCO Funds or portfolio companies or other investments directly or indirectly owned by such PIMCO Funds. In certain cases, such service providers or personnel thereof may have attributes of our “employees” (e.g., they may have dedicated offices at PIMCO, participate in general meetings and events for PIMCO personnel, work on PIMCO matters as their primary or sole business activity and/or be compensated on a weekly or monthly basis rather than on a project basis), and in other cases, they may be “dual-hatted” and be a PIMCO employee with respect to certain activities, even though they are not considered PIMCO employees, affiliates or personnel in relation to other activities pertaining to a PIMCO Fund. Securities Lending. While PIMCO primarily offers investment management services, we generally do not enter into securities lending arrangements for our Clients (other than for the PIMCO Funds, as defined below). Under typical securities lending arrangements, a manager loans a security held in a client’s portfolio to a broker-dealer in exchange for collateral. The client may earn potentially enhanced returns from these arrangements by collecting finance charges on the loan or by investing the collateral. Such returns are generally shared between the client and the securities lending agent, and the risk associated with the investment of collateral is generally borne by the client. On occasion, if instructed by a Client, we may enter into securities lending transactions although PIMCO does not manage the investment of collateral in connection with such arrangements (other than securities lending arrangements for the PIMCO Funds). In these instances, we will have entered into a Master Securities Loan Agreement with a counterparty and the transaction must meet all the requirements under the agreement. Some Clients have established separate securities lending arrangements with their custodian. If a Client has entered into these arrangements, the Client and its custodian are responsible for adhering to the requirements of such arrangements, including ensuring that the securities or other assets in the Account are available for any securities lending transactions. For Accounts that we actively manage, we execute transactions based on a number of factors, including market conditions and best execution, and generally do not consider factors relating to a Client’s securities lending arrangements, such as whether the Client’s custodian may need to recall securities on loan to settle the sales transactions. We have established policies and procedures in the event there is a loss or overdraft in connection with a transaction. Please refer to “Claims Process” in Item 12, which would include any loss relating to PIMCO’s sale of a security that is not available in an Account due to such Client’s securities lending activities. Certain Clients that we manage or sponsor that are pooled investment vehicles (“PIMCO Funds” or “Funds”) engage in securities lending, as described in their respective offering documents. Litigation, Class Actions and Bankruptcies. As an investment manager, we may be asked to decide whether to participate in litigation, including by filing proofs of claim in class actions, or bankruptcy proceedings for assets held in an Account. It is the Client’s responsibility to monitor and analyze its portfolio and consult with its own advisers and custodian about whether it may have claims that it should consider pursuing. As a general matter, PIMCO cannot, without express Client written authorization, exercise any rights a Client may have in participating in, commencing or defending suits or legal proceedings such as class actions for assets held or previously held in an Account, although we may do so for the PIMCO Funds. In the case of Separate Account Clients, upon mutual agreement of PIMCO and the Client and receipt of a letter of authorization and Power of Attorney, we will assist Clients or their custodian in assembling transaction information to file a proof of claim (such as a class action or bankruptcy claim). Generally, a Separate Account’s custodian should receive all documents for these matters because the securities are held in the Client’s name at the custodian and the Separate Account Client should direct PIMCO ADV Part 2A Brochure | 2019 7 its custodian as to the manner in which such matters should be handled. In connection with bankruptcies, reorganizations or other transactions we may enter into releases of claims, provide indemnities, file lawsuits or otherwise participate in legal actions, or take similar actions, where permitted, on behalf of PIMCO Funds and Separate Accounts in order for those Funds and Clients to participate (or participate to the extent PIMCO believes desirable) in the bankruptcy, reorganization or other transaction, although we are under no obligation to do so. Any such action will bind the Client with respect to the securities or other investments with respect to which the action was taken. In addition, to the extent that a Client holds assets such as bankruptcy claims, we may, but will not be obligated to, take such actions as we believe desirable in order to realize the value of such asset. Clients that are currently or were formerly investors in, or otherwise involved with, the investments that are the subject of a legal action may or may not (depending on the circumstances) be parties to the particular legal action, with the result that a Client may participate in an action in which not all Clients with similar investments may participate. In these instances, non-participating Clients may benefit from the results of such actions without bearing or otherwise being subject to the associated fees, costs, expenses and liabilities.
Tailoring Services to Client Needs
Upon selecting an investment strategy, Clients typically provide PIMCO with specific investment parameters in the form of investment guidelines. The investment guidelines may include, for example, restrictions on investing in certain securities, such as product types, issuers or securities with certain attributes. The investment guidelines form a part of our management agreement with a Client and we manage the Account within these confines. Clients should be aware, however, that certain restrictions can limit our ability to act and as a result, the Account’s performance may differ from and may be lower than that of other Accounts that have not limited our discretion.
Important Information About Procedures For
Establishing a New Customer Relationship
To help the government fight the funding of terrorism and money laundering activities, federal law requires certain financial institutions to obtain, verify, and record information that identifies each Client who opens an Account or establishes a relationship. Accordingly, when we establish a Separate Account relationship with a Client, we may ask for the Client’s name, address, and other information or documentation (e.g., a formation document or tax document) that will allow us to identify and verify the Client.
Wrap Program Services
PIMCO also offers investment management services through wrap fee programs (“Wrap Programs”) that are sponsored by banks, broker-dealers or other investment advisers (each a “Sponsor”). Sponsors may or may not be affiliated with PIMCO. In a typical Wrap Program, each Wrap Program Client enters into an agreement with a Sponsor, who provides or arranges for the provision of an array of services, including some or all of the following: assistance with establishing client goals and objectives, asset allocation analysis, security selection and other portfolio management services, selection of investment advisers, sub-advisers, custodians and/or broker-dealers, trade execution and providing ongoing monitoring, reporting and client support, which may be covered by a single “wrap” fee. Clients may access certain Wrap Programs through an intermediary such as a bank, broker-dealer or other investment adviser rather than the Sponsor and the intermediary may provide some or all of the functions generally provided by a Sponsor. The services to be performed by the Sponsor, PIMCO or others in these Wrap Programs, and related fees, are generally detailed in the relevant agreements between or among the Client, the Sponsor, PIMCO and/or any other parties. With respect to a Sponsor that is a registered investment adviser, the services provided and other terms, conditions and information related to the Wrap Program are also described in the Wrap Program disclosure documents and the agreement between the Client and the Sponsor. Sponsors that are not registered PIMCO ADV Part 2A Brochure | 2019 8 investment advisers may, but are not required to, provide a similar Wrap Program disclosure document (each Wrap Program disclosure document, whether for a registered investment adviser or another Sponsor, a “Wrap Program Brochure”). All Wrap Program Clients and prospective Wrap Program Clients should carefully review the terms of the agreement with the Sponsor and the relevant Wrap Program Brochure to understand the terms, services, minimum account size and any additional fees or expenses that may be associated with a Wrap Program account. PIMCO may make available through Wrap Programs the same or similar strategies that are available to institutional clients or through Funds; however, not all of PIMCO’s strategies are available through Wrap Programs and not every PIMCO strategy that is available through a particular Wrap Program will be available through other Wrap Programs. Further, the manner in which PIMCO executes a strategy through Wrap Programs may differ from how that same or a similar strategy is executed through another Wrap Program or for a Fund or institutional Client. For instance, the execution of a particular strategy in a Wrap Program may differ from the execution of the same or a similar strategy for a Fund or institutional Client due to the need to adhere to “reasonable restrictions” imposed by the Wrap Program Client or due to the use of affiliated no-fee registered investment companies or other affiliated commingled vehicles rather than individual securities. Accordingly, the performance of a strategy available through a Wrap Program may differ from the performance of the same or a similar strategy that is executed through another Wrap Program or for a Fund or institutional Client. As a provider of investment advice under a Wrap Program, PIMCO is generally not responsible for determining whether a particular Wrap Program, PIMCO’s investment style or a specific PIMCO strategy is suitable or advisable for any particular Wrap Program Client. Rather, such determinations are generally the responsibility of the Sponsor and the Client (or the Client’s financial advisor and the Client) and PIMCO is responsible only for managing the Account in accordance with the selected investment strategy and any “reasonable restrictions” imposed by the Wrap Program Client, as discussed below. For its services, PIMCO typically receives a portion of the wrap fee or may be paid a fee by the Wrap Program Client. For a further discussion of the nature of Wrap Program arrangements, including the fees charged by the Sponsor and paid to PIMCO, see Item 5, Fees and Compensation, Wrap Programs. Typically, the investment management services we provide in connection with these Wrap Programs are discretionary (“Discretionary Wrap Programs”). In Discretionary Wrap Programs, PIMCO is generally responsible for causing the portion of each Discretionary Wrap Program Client’s Account that is managed by PIMCO to engage in transactions that are appropriate for the selected strategy. Wrap Program accounts within a particular strategy are generally managed similarly, subject to a Wrap Program Client’s ability to impose reasonable restrictions (such as a prohibition on holding the securities of a particular issuer within the Wrap Program Client’s Account). Because PIMCO’s advisory services to these Accounts are strategy-dependent, PIMCO will not accept a restriction that PIMCO believes would be inconsistent with the investment strategy. “Reasonable restrictions” imposed by a Wrap Program Client serve to limit PIMCO’s freedom of action with respect to an Account and, as a result, the performance of Accounts for which such investment restrictions are imposed may differ from, and may be worse than, the performance of Accounts within the same strategy that lack such restrictions. PIMCO may participate in Wrap Programs sponsored by unaffiliated, third-party Sponsors as well as Wrap Programs sponsored by an affiliate of PIMCO. PIMCO typically does not compensate Sponsors for PIMCO’s inclusion in a Wrap Program or for introductions of Clients through a Wrap Program. However, the portion of the total wrap fee paid to PIMCO may include breakpoints reducing the effective fee rate payable to PIMCO and thus increasing the amount retained by the Sponsor at higher asset levels. These fees may be negotiable, with the relationship size being a factor in PIMCO ADV Part 2A Brochure | 2019 9 negotiation. For certain Wrap Programs, PIMCO may provide or compensate a Sponsor for marketing support or other services provided. Additionally, affiliated Sponsors may have an incentive to recommend PIMCO’s services over the services of unaffiliated managers. Sponsors may apply different methods of analysis, use different types of information or apply different thresholds in determining whether to recommend an affiliated manager than are applied when recommending an unaffiliated manager. Depending upon the particular Wrap Program, accounts may be funded with cash and/or securities. Restrictions as to funding with securities in-kind are described in the relevant Wrap Program brochure and may include certain securities or types of securities that will be liquidated by PIMCO or the Sponsor. Under normal circumstances, Accounts will generally be fully invested in accordance with the relevant investment strategy within 90 days of PIMCO managing the Account. To the extent that an account is funded with portfolio securities rather than solely cash, implementation may be further delayed because any in-kind contributions that are not consistent with the intended holdings for the Account will be liquidated at the Wrap Program Client’s risk and expense and without taking into account any adverse tax consequences to the Wrap Program Client. While the Sponsor is responsible for most aspects of the relationship with a Wrap Program Client, our personnel who are knowledgeable about the Wrap Program Account and its management will be reasonably available to Wrap Program Clients for consultation (either individually or in conjunction with Sponsor personnel), upon a Wrap Program Client’s request, as required by applicable law or as agreed between PIMCO and the Sponsor. Because the Sponsor is generally responsible for reports to Wrap Program Clients, typically we will supply the Sponsor with information necessary for the Sponsor to provide such reports directly to Wrap Program Clients. Upon request or as agreed with a Sponsor, we may provide investment holdings, transactions, and performance reports directly to Discretionary Wrap Program Clients on a periodic basis. Moreover, with respect to each Discretionary Wrap Program Client, PIMCO reviews each managed portfolio periodically to ensure it is managed in accordance with the applicable investment objectives, guidelines and restrictions. In addition, with respect to Discretionary Wrap Programs, PIMCO has entered into an arrangement with SEI Global Services, Inc. (“SEI”) under which SEI performs certain administrative and operational functions, such as accounting, reconciliation, trade settlement, recordkeeping, billing and reporting. Typically these services are paid for by PIMCO, not the Discretionary Wrap Program Clients. In addition to the advisory services we provide in the Discretionary Wrap Programs, we may provide non- discretionary investment management services to a Sponsor who exercises investment discretion (“Non- Discretionary Wrap Programs”). In Non-Discretionary Wrap Programs, we typically provide a model portfolio (which may include allocations to direct investments or to PIMCO Funds, or a combination thereof) to be analyzed and implemented by the Sponsor or another manager. Further, in Non-Discretionary Wrap Programs, the Sponsor or other manager is typically responsible for applying any client-imposed restrictions to the model portfolio. In certain Non-Discretionary Wrap Programs, the Sponsor who exercises investment discretion may direct PIMCO to place orders for the execution of purchase and sale transactions for Wrap Program Client portfolios.
Stable Value Investment Management Service
PIMCO offers a wide variety of stable value services, including 1) full-service stable value management, in which PIMCO handles all aspects of the stable value investment strategy, 2) an investment-only fixed income manager hired directly by plan sponsors for their stable value portfolio, or 3) a fixed income sub-adviser hired by other stable value managers and insurance companies to manage all or a portion of the assets of a fixed income portfolio. PIMCO manages Separate Account portfolios for large institutional defined contribution plans as well as a stable value commingled vehicle for the small-and mid-sized defined contribution marketplace. PIMCO ADV Part 2A Brochure | 2019 10
Model Portfolios
PIMCO develops and maintains model portfolios (“Model Portfolios”) comprised of PIMCO Funds, which may include ETFs. These Model Portfolios are licensed or otherwise made available to intermediaries and accessed by intermediaries through third-party platforms. Users of such platforms may use the Model Portfolios as investment strategies for managing their underlying clients’ accounts. The Model Portfolios aim to provide exposure to investment strategies that collectively reflect PIMCO’s investment outlook. As further described below, a variety of factors may influence the inclusion or exclusion of a Fund in a Model Portfolio. Model Portfolio allocations are based on what PIMCO believes to be generally accepted investment theory. Model Portfolio allocations are not based on any particularized financial situation, or need, and are not intended to be, and should not be construed as, a forecast, research, investment advice or a recommendation for any specific PIMCO or other strategy, product or service. The risks of a Model Portfolio allocation will be based on the risks of the Funds represented in the Model Portfolio allocation. The Model Portfolio allocation is subject to the risk that the selection of the underlying Funds and the allocation and reallocation of the Model Portfolio allocation’s assets among the various Funds may not produce the desired result. Model Portfolios may not reflect the impact that material economic and market factors might have had on PIMCO’s decision making if PIMCO were actually managing a portfolio with assets pursuant to the Model Portfolio. The allocations to underlying Funds have changed over time and may change in the future. The selection and weighting process across underlying Funds is informed based on return estimates driven by PIMCO’s forward looking view and risk estimates driven by PIMCO’s analytic infrastructure. Management risk is the risk that the investment techniques and risk analyses applied by PIMCO will not produce the desired results, and that certain policies or developments may affect the investment techniques available to PIMCO in connection with managing the strategy. Implementing investment professionals may or may not implement the Model Portfolio allocation as provided, and actual allocations to underlying Funds may vary. There are expenses associated with the underlying Funds in addition to any fees charged by implementing investment professionals. Additionally, the implementing investment professional may include cash allocations, which are not reflected, or exclude or substitute certain Funds. Information about Model Portfolios is made available on certain financial intermediary and other platforms and is updated periodically in accordance with the Model Portfolio’s defined production schedule. please register to get more info

Open Brochure from SEC website
Pooled Investment Vehicles $905,040,401,035
Discretionary $2,567,720,178,322
Non-Discretionary $4,190,561,902
Registered Web Sites

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