The Egyptian fund manager Mohamed El Erian has stepped down as the chief executive and co-chief financial officer of Pimco, one of the world’s largest fixed-income investment companies.
Neither Mr El Erian, Pimco nor Allianz Insurance, which owns the investment firm, provided a reason for the resignation.
Bill Gross, Pimco’s co-founder, who is 69, was quoted in a 2010 interview with Bloomberg as saying that Mr El Erian, who is 55, would likely take over the direction of the company when he retired.
“What happens longer term is an open question. I have no plans as of now,” said Mr El Erian.
Yesterday Mr Gross tweeted, from Pimco’s account: “Pimco’s fully engaged. Batteries 110 per cent charged. I’m ready to go for another 40 years.”
The company’s flagship fund, the Pimco Total Return Fund, recorded a loss of 1.9 per cent in 2013 – its worst performance since 1994.
Investors retreated from the fund over the course of the year. In October, it was overtaken as the world’s largest mutual fund by Vanguard’s Total Stock Market Index Fund. Net outflows from the fund totalled US$41 billion last year as investors reduced their exposure to bonds.
That month, the company hired Virginie Maisonneuve as head of equities, part of an effort to diversify the company away from its focus on bond markets.
Fixed-income investors took a hit following the Federal Reserve’s announcement that it would begin tapering at the end of last year.
Some commentators have described the global movement from bond markets into equities as “The Great Rotation” as an era of low interest rates and quantitative easing comes to a close.
The S&P index of 500 stocks gained 29.6 per cent last year, while the Barclays Aggregate, a measure of returns on United States bonds, returned minus 2.02 per cent – a clear indication of the divergence between equity and bond performance.
That is also bad news for any fund that generates more than 65 per cent of its return from fixed-income markets, as Pimco’s Total Return Fund does.
Egyptian by nationality but born in New York, Mr El Erian read economics at Queen’s College, Cambridge, before completing a master’s degree and doctorate at St Anthony’s College in Oxford.
He then joined the IMF, where he worked as a staff economist before becoming a deputy director of the organisation.
Mr El Erian moved to Pimco in 1999, where he worked until 2005. He spent two years managing Harvard University’s endowment, which attracted some controversy under his tenure for the size of its payments to staff, but recorded a 23 per cent gain in his first year in charge of the fund.
He is a prolific commentator and writes regularly for a number of newspapers and magazines, and is the author of When Markets Collide, an investment guide published in 2008.
The New York Times reported in 2012 that Mr El Erian earned $100 million that year.
Mr Gross said: “Mohamed has been a great leader, business builder and thought leader for Pimco and our clients. Together we have guided the firm and served our clients during a period of significant change in the global economy and financial markets.”
He will remain in post until March, at which point Douglas Hodge, the company’s chief operating officer, will take over. Mr El Erian will also continue to hold an advisory role at Allianz Insurance.
With presidential elections due to be held this year in his native Egypt, some commentators have suggested that Mr El Erian may look to politics for his next role.
abouyamourn@thenational.ae
* With agencies
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
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