PIMCO raises $5.5 billion for private credit funds - Business Insider

Credit funds, especially those with exposure to structured credit like mortgage-backed securities, were flattened in a disastrous March, and many were forced to sell at a loss to meet margin calls from banks.PIMCO's nearly $4 billion Tactical Opportunities fund lost roughly 15% in March, but was able to avoid forced selling, sources tell Business Insider, and even added to positions in the month.The fund has raised $250 million — one of several private credit funds that PIMCO has raised money for.Overall, PIMCO has raised around $5.5 billion across several private credit funds.Visit Business Insider's homepage for more stories.

It's not often that a fund is able to raise additional money after losing more than a tenth of its assets in a single month.PIMCO's nearly $4 billion Tactical Opportunities hedge fund was slammed in March thanks to the exposure to structured credit products like mortgage-backed securities, sources tell Business Insider, but has still raised $250 million for the year — one of several private credit funds the asset management giant has been calling investors about. The fund, which was down roughly 15% in March but up 2.17% in April, has communicated with investors that the portfolio management team believes this the best buying opportunity in a decade, sources say. The fund avoided some of the forced selling that other managers dealt with in March, due to margin calls from lenders, and ended up adding more positions than selling for the month. The fund is down a little more than 12% for the year through April.The average credit fund lost 6.4% in March, according to PivotalPath, a consultant database for the industry that has more than 2,000 managers and $2.3 trillion in assets on its platform, with certain segments doing worse than others. Structured credit and mortgage-related funds fell by more than 12% on average, and distressed fell by 11%, found the database.

The Newport Beach, Calif.-based manager declined to comment. Despite the trouble many credit managers have run into, industry observers expect a surge in interest in specialized credit shops that have proven to be winners in distressed situations. PIMCO has tapped into that demand, with sources telling Business Insider that the firm has raised $5.5 billion in private credit strategies since the beginning of the year.The funds include the aforementioned Tactical Opportunities Fund as well as a $3 billion distressed fund, known as Distressed Credit Opportunities Fund III, or Disco III, which Bloomberg reported on. Notes from a board meeting of Ventura Employees' Retirement Association from January show the approval of a $50 million investment in PIMCO's private fund Credit Opportunity Fund III, and sources say the firm's Flexible Income Credit Fund, an interval fund, has raised money as well. PIMCO's hedge funds are overseen by CIO Dan Ivascyn, among others. The Tactical Opportunities Fund is also managed by Josh Anderson and Alfred Murata, while the Global Credit Opportunities Fund, which lost more than 13% in 2019, is managed by Jon Horne and Ivascyn.

PIMCO runs around $25 billion in alternative credit and private credit strategies, but that total will balloon to $100 billion the firm's deal to acquire Allianz's real estate investing arm closes this year. The firm has built out its private investing arm over recent years, poaching Greg Hall from Blackstone in 2017 to run its private strategies and Jamie Weinstein from KKR in 2019 to run its corporate special situations group.