Pimco to turn to an old hand to steady the ship

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Pimco's Paul McCulley, act 2

Bond manager Pimco lost one familiar face this year but is seeing another return.

The Newport-Beach, California-based firm, which manages just under $2 trillion for clients, said Tuesday it has re-hired Paul McCulley, who has held a variety of positions for Pimco but now will serve as managing director and chief economist.

McCulley's hiring comes just months after CEO Mohamed El-Erian left amid reports of discord with Pimco founder Bill Gross. El-Erian is now chief economic adviser for Allianz, Pimco's parent company.

Indeed, McCulley comes to Pimco during a difficult time for the firm.

Read MoreAllianz CFO plays down hefty Pimco outflows

Its flagship Total Return Fund—the world's largest bond mutual fund with $230 billion under management—has suffered some $55 billion in outflows over the past year, according to Morningstar. The fund has gained 1.92 percent year to date, which is underperforming the Barclays U.S. Aggregate Bond index, up 2.7 percent thus far.