Pimco Plans $2 Billion Distressed-Debt Fund: WSJ

Pacific Investment Management Co. (Pimco) is planning to take advantage of relatively cheap mortgage securities in the wake of the recent credit crisis by launching a $2 billion distressed-debt fund to buy the beaten-down assets, the Wall Street Journal reported Thursday.

The fund, to be called the Pimco Distressed Mortgage Fund, is designed to invest in various assets including mortgage-backed securities, asset-backed securities and collateralized debt obligations, according to a Pimco document, the Journal reported.

A spokesman at Pimco, a Newport Beach, Calif.-based company that has $693 billion in assets, declined to comment to the paper. The move from Pimco mirrors a similar offering from rival TCW Group, which has already starting making investments in the risky assets, according to the Journal.