To be sure, the plunge in emerging markets has taken a bite out of the performance of funds managed by some of its biggest rivals, including top names on Wall Street, including BlackRock, Morgan Stanley, and Goldman Sachs.
And while Pimco has gone through tougher times in the past couple of years, its longer-term investment track record for a firm of its size is unmatched.
Pimco's emerging markets bond funds are also some way away from being the worst performing this year - in the first four months, its four funds in the sector were ranked 43rd, 53rd, 68th, and 81st out of 100, according to Morningstar.
But such positions in the table are a far cry from the days when El-Erian's daring yet highly profitable bet on Brazilian bonds in 2002, when others had unfounded concerns about the election of a left-wing government, helped to make his and Pimco's reputation as a strong player in the sector.
Wooed by Batista
Perhaps Pimco's biggest single misfire in emerging markets debt was the firm's investment in the bonds of Batista's OGX. Batista's fortune dropped from an estimated $30 billion in March 2012 to less than $300 million two years later, according to Forbes, mainly due to the ugly combination of a large debt burden and investments in assets that failed to produce returns.
Batista's empire was already beginning to collapse even as Pimco amassed a big position in OGX bonds maturing in 2018 and 2022. Sources familiar with the situation have told Reuters that they estimate the bet got as high as $800 million at one point in May last year.
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Pimco declined to answer questions about the position.
OGX, which in October made Latin America's largest bankruptcy filing with more than $5 billion in liabilities, has since changed its name and is now known as Óleo e Gás Participações.
The company's bonds maturing in 2022 fell 93.7 percent in 2013, and, according to one of the sources, Pimco's losses from its OGX investment are now estimated to be more than $300 million.
The timing of the OGX debt purchases by the firm was particularly perplexing, the sources said.
Su Fei Koo, an emerging markets portfolio manager at DoubleLine Capital, one of Pimco's main competitors, said: "Everyone was excited about OGX around May 2011—right before they issued bonds—and I thought to myself: 'Here's a company with no EBITDA (earnings before interest, tax, depreciation and amortization) and no discovery of oil," adding that she saw "no improving credit path" and therefore didn't buy the bonds.
It is unclear who at Pimco made the decision to invest in OGX debt.
According to Morningstar analyst Eric Jacobson, Mark Kiesel, global head of corporate bond portfolio management, and his credit team have led the way on Pimco's OGX coverage. Kiesel has recently been elevated to become one of six deputy chief investment officers under Gross in the wake of El-Erian's departure.
Kiesel met with Batista one-on-one in late 2012, months before OGX debt came under severe selling pressure, and at a time when Pimco was building its investment in the bonds, a person familiar with the situation told Reuters.
The results of that meeting could not be ascertained.
Brigitte Posch, who was head of emerging market corporate debt investing at Pimco until last fall, would not comment for this article. She is now leading a new emerging markets debt investment team at Babson Capital Management in London.
Neither would her last boss at Pimco, Michael Gomez, who is co-head of the firm's emerging markets portfolio management team.
Pimco declined to make Kiesel available for comment.