Pimco to boost hiring for push into private credit

investmentnews.com:

Pacific Investment Management Co. has a decent record of betting on distress. Almost a decade ago, the firm managed to cope with the chaotic departure of its founder Bill Gross because of the fortune it made from snapping up cheap mortgage debt after the financial crisis.

Now, as the bond behemoth manages another awkward moment — confronted by choppy fund flows and returns — it wants to repeat the trick. This time it wants to take advantage of finance’s latest craze: private credit.

In an interview with Bloomberg News, the man in charge of Pimco’s $162 billion alternative-investment business says he’s been stepping up hiring this year as the firm beefs up its private-lending team to seize opportunities in a credit market that’s braced for carnage from stubbornly high interest rates.

“As long as rates remain elevated from where deals were underwritten there’s going to be an increasing strain for some of these borrowers and structures,” says Jamie Weinstein. “The pot is on the stove and the flame is on.”

The comments reinforce those of Oliver Baete, chief executive officer of Pimco owner Allianz SE, who told Bloomberg last month of plans to push deeper into alternative assets such as property and private credit.

“We’ve added resources and headcount in the last six months to the alternatives business overall,” Weinstein says, “And particularly within corporate direct lending and asset-based lending, where we’re slowly scaling up our private strategies businesses.” The pullback in bank lending, which accelerated in 2023 after the collapse of Silicon Valley Bank and Silvergate Capital Corp., is creating “meaningful opportunities,” he adds.

Pimco joins a throng of asset managers flocking to private credit, drawn to higher fees