Since 2002, PIMCO has managed a variety of hedge fund strategies that seek to capitalize on pricing dislocations globally by taking directional and relative value positions. Through prudent risk management and diversified investment approaches, these strategies seek to offer investors attractive risk-adjusted returns that are uncorrelated with traditional investments.
PIMCO’s hedge fund strategies incorporate the firm’s expertise in macroeconomic forecasting, fundamental research, quantitative analysis and trading across global interest rate, credit, currency, equity and commodity markets. These strategies draw on the skills of PIMCO’s portfolio management team, integrated investment approach and global reach in an effort to take advantage of structural inefficiencies and mispriced assets.
PIMCO’s hedge fund strategies include:
Global Macro Strategy
This is a discretionary global macro and fixed income relative value strategy that seeks to produce absolute returns by using PIMCO’s macroeconomic insights to guide directional and relative value ideas across both developed and emerging financial markets. It has a core concentration on fixed income and currency instruments and an opportunistic focus on equity and commodity exposures. PIMCO’s Global Investment Committee and other internal resources generate broad investment themes, while the global portfolio management team identifies relative value, tactical trading and hedging strategies. The lead portfolio manager is Qi Wang.
Credit Relative Value Strategy
The credit relative value strategy focuses on identifying the most compelling relative value opportunities created by market inefficiencies across the global credit markets. It seeks to deliver positive returns with low volatility, low correlation to the overall market direction, and an emphasis on capital preservation. Investments are made across structured credit, corporate credit, emerging markets and sovereigns alongside a macro/hedging strategy. The primary sources of potential returns are bottom-up relative value strategies – including sector, issuer, capital structure, cross-currency, credit curve, basis- and event-driven trades. The lead portfolio managers are Dan Ivascyn and Jon Horne.
Multi-Asset Volatility Strategy
This is a multi-asset relative value and volatility arbitrage strategy that seeks to deliver consistent, absolute returns from PIMCO’s best option- and volatility-related ideas across global asset classes. The strategy seeks to generate absolute returns that have low correlations with other asset classes. Specific approaches include systematic volatility trading, opportunistic relative value trading, macro event-driven trading, and tail risk hedging strategies. These strategies are deployed across a variety of global liquid asset classes with a focus on interest rates, currencies, equities and commodities. The lead portfolio manager is Josh Thimons.
Commodity Alpha Strategy
The Commodity Alpha Strategy is a long/short strategy that takes a relative value approach across a broad range of commodity markets, relying on top-down macro and bottom-up micro investment insights to develop a diverse set of trading ideas. The portfolio is primarily constructed with both fundamental and structural trades. The strategy seeks to generate returns that are sustainable across economic cycles with low correlation to broad commodity, fixed income and equity markets. The lead portfolio managers are Mihir Worah, Greg Sharenow and Nicholas Johnson.
The tactical credit strategy is a directional strategy in a hybrid structure that primarily spans structured credit and corporate credit in both public and private markets. The strategy seeks to capture illiquidity and complexity premiums in orphaned or off-the-run credits. Through a combination of bottom-up fundamental analysis and macro expertise, the strategy targets investments that offer a robust return profile. In addition, by traversing public and private markets, the strategy identifies ways to potentially enhance returns either through the aggregation and securitization of assets or decomposition of structures. The lead portfolio managers are Dan Ivascyn, Josh Anderson and Alfred Murata.