Gross' sudden Pimco exit may quicken outflows to rivals

Bill Gross, who built Pimco into a $2 trillion asset manager and became one of the world's best-known bond investors, quit the firm he co-founded on Friday after his flagship fund suffered its 16th straight month of outflows and amid a Securities and Exchange Commission probe into whether one of his funds artificially inflated returns. Gross's sudden departure follows a public falling-out with former heir-apparent Mohamed El-Erian, who quit in January, and may accelerate net outflows from its funds, which have shed some $35 billion this year, the worst in the mutual fund industry out of 764 fund groups, Morningstar data show. Pimco is likely to name Dan Ivascyn to replace Gross as chief investment officer, said a person familiar with the situation. "This will likely accelerate the negative cash outflow momentum at Pimco," said David Schawel, vice president and portfolio manager of Square 1 Financial.

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