Pimco Intends to Participate in Toxic Asset Plan

Bill Gross

Bill Gross, the manager of the world's largest bond fund, gave the Obama administration's financial stability effort a much-needed endorsement Monday, saying Pimco will participate in the public-private plan.

"This is perhaps the first win/win/win policy to be put on the table and it should be welcomed enthusiastically," the co-chief investment officer of Pimco told Reuters.

"We intend to participate and do our part to serve clients as well as promote economic recovery," he added.

The U.S. Treasury Department on Monday rolled out detailed plans for persuading private investors to help rid banks of up to $1 trillion in toxic assets that are seen as a roadblock to economic recovery.

Video: Pimco is intrigued by the potential double-digit growth from the toxic asset plan, says William Gross, co-chief investment officer/founder.

Generous government financing will underpin the so-called Public-Private Investment Program, which Treasury will kick off with $75-$100 billion that comes from its existing $700-billion bailout fund approved by Congress last fall.

"From PIMCO's perspective, we are intrigued by the potential double-digit returns as well as the opportunity to share them with not only clients but the American taxpayer," Gross said.

Gross's endorsement is important after the lack of big investor interest in the debut of the Federal Reserve's consumer lending program last week.

The Fed's Term Asset-Backed Securities Loan Facility, or TALF, received only $4.7 billion in requests for loans out of $200 billion on offer, heightening fears private capital will also shun the government's toxic-asset plan amid public outrage over outsized executive bonuses.

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