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CNBC Exclusive: PIMCO CEO Douglas Hodge & PIMCO Group CIO Daniel Ivascyn on CNBC's "Street Signs" Today

CNBC EXCLUSIVE: PIMCO CEO DOUGLAS HODGE & PIMCO GROUP CIO DANIEL IVASCYN ON CNBC'S "STREET SIGNS" TODAY

WHEN: TODAY, TUESDAY, SEPTEMBER 30TH AT 2PM ET

WHERE: CNBC'S "STREET SIGNS"

Following is the unofficial transcript of a CNBC EXCLUSIVE interview with PIMCO CEO Douglas Hodge & PIMCO Group CIO Daniel Ivascyn today, Tuesday, September 30th on CNBC's "Street Signs" at 2PM ET. Video of the interview is available on CNBC.com.

All references must be sourced to CNBC.

BRIAN SULLIVAN: THE INVESTING WORLD WAS INDEED ROCKED LAST WEEK WHEN BILL GROSS ANNOUNCED THAT HE IS QUITTING THE FIRM HE FOUNDED BACK IN 1971 AND WILL BE JOINING TINY JANUS CAPITAL. PIMCO QUICK TO REACT AND NAMING CEO DOUG HODGE AND NEW CIO DAN IVASCYN. WE GOT THEM IN AN EXCLUSIVE INTERVIEW TOGETHER THE FIRST TIME THEY'VE EVER BEEN ON TELEVISION TOGETHER. AND THE FIRST THING I ASKED THEM WAS BILL GROSS ABOUT TO BE FIRED BEFORE HE QUIT?

DOUG HODGE: BILL GROSS CHOSE TO RESIGN THIS PAST WEEK. WE HAD IN PLACE A SUCCESSION PLAN THAT HAD BEEN IN PROCESS ALL DURING THE COURSE OF THIS YEAR. BILL WAS GOING TO LEAVE EVENTUALLY. WE ALL KNEW THAT, WHETHER IT WAS ON FRIDAY, NEXT YEAR OR THE YEAR AFTER. WE PUT OUR PLAN IN PLACE AND EXECUTED AND WE ARE MOVING FORWARD.

SULLIVAN: OK, HOW DID THE CHANGE COME ABOUT? TAKE US INSIDE THE FINAL COUPLE OF DAYS. I'VE SPOKEN WITH A COUPLE OF PEOPLE THAT ARE FORMER INSIDERS THERE AND THEY SAID IT WAS A VERY DIFFICULT ENVIRONMENT.

HODGE: I WOULDN'T CHARACTERIZE IT THAT WAY. THERE WERE OF COURSE DISCUSSIONS WITH BILL, BUT ULTIMATELY IT WAS HIS DECISION TO LEAVE AND WE RESPECTED HIS DECISION AND WE ARE MOVING FORWARD.

SULLIVAN: WOULD YOU HAVE WANTED HIM TO STAY, DOUG?

HODGE: YOU KNOW, BRIAN, BILL HAS MADE ENORMOUS CONTRIBUTIONS TO PIMCO THROUGH THE YEARS AND IN FACT HAS MADE ENORMOUS CONTRIBUTIONS TO OUR ENTIRE INDUSTRY AND WE WISH HIM WELL.

SULLIVAN: YEAH AND LISTEN, BILL HAS BEEN A GOOD FRIEND OF CNBC. BEEN A GOOD FRIEND OF OUR SHOW AS WELL AND HOPEFULLY HE WILL CONTINUE TO BE SO, AND NO DOUBT A GENIUS INVESTOR. ALTHOUGH, ALL OF THE THINGS WE HAVE READ SO FAR DOUG, HAVE MAYBE NOT PAINTED HIM IN THE BEST LIGHT. WHAT HAS BEEN THE EMPLOYEE REACTION INTERNALLY SINCE THE CHANGE?

HODGE: BRIAN, THIS FIRM IS MOVING FORWARD. WE ARE ENTHUSIASTIC, WE ARE OPTIMISTIC. OUR CLIENTS ARE STANDING WITH US. THIS FIRM IS ON THE MOVE AND WE ARE READY TO GO.

SULLIVAN: OK, LET'S GO BACK TO THAT LAST POINT YOU MADE. THE CLIENTS ARE STANDING WITH YOU. BECAUSE THAT IS KEY. REPORTS SAY THAT WE HAVE HAD AS MUCH AS $550 MILLION SO FAR AND COUNTING IN OUTFLOWS OF CLIENT ASSETS. YOU'RE THE CEO NOW DOUG, HOW DO YOU KEEP MORE MONEY FROM FLOWING OUT? HOW DO YOU STOP THE OUTFLOWS COMING FROM PIMCO AND THE TOTAL RETURN FUND?

HODGE: WELL FIRST, I THINK IT IS IMPORTANT TO RECOGNIZE THAT WE MANAGE AN ENORMOUS POOL OF ASSETS HERE AT PIMCO. AND WE HAVE DELIVERED SUPERIOR PERFORMANCE FOR MANY YEARS. OUR CLIENTS ARE COMMITTED AND THEY ARE LOYAL. AND WHEN I LOOK AT OUR CIO TEAM, HEADED BY MY COLLEAGUE HERE DAN IVASCYN, AS OUR GROUP CIO, PRIOR TO BILL'S DEPARTURE, THEY WERE MANAGING OVER 75% OF THE FIRM'S ASSETS. AND THEIR TRACK RECORDS INDIVIDUALLY AND COLLECTIVELY, ARE RIGHT AT THE VERY TOP. IN FACT, IF YOU LOOK AT THE ASSETS THEY WERE MANAGING BEFORE BILL LEFT, THIS YEAR, 92% OF THOSE ASSETS WERE OUTPERFORMING THEIR BENCHMARKS. OVER THE LAST THREE YEARS, 95% AND OVER THE LAST THREE YEARS, 98% OF THOSE ASSETS WERE OUTPERFORMING THEIR BENCHMARKS. SO, WE HAVE A VERY STRONG TEAM HERE. OUR CLIENTS UNDERSTAND THAT AND THE VAST MAJORITY OF THEM ARE STAYING WITH US.

SULLIVAN: ALRIGHT, SO I WILL POINT THE FINGER AT MYSELF THEN, DOUG, GIVEN THAT WHAT YOU ARE SAYING, 75% OF THE ASSETS WERE MANAGED OUTSIDE OF BILL'S CONTROL, DO YOU FEEL LIKE WE, ME, THE MEDIA, HAS OVERSTATED MAYBE HIS IMPORTANCE TO THE FIRM?

HODGE: I WOULD JUST SIMPLY SAY THAT BILL HAS BEEN AN IMPORTANT CONTRIBUTOR, HE WAS THE FOUNDER OF THIS FIRM, HE HAS MADE ENORMOUS CONTRIBUTIONS TO PIMCO BUT WE ARE MOVING AHEAD.

SULLIVAN: OK, I ASSUME, DOUG, YOUR JOB – ONE, IS TO MEET WITH CLIENTS, TO MEET WITH PENSION FUNDS, TO MEET WITH PENSION CONSULTANTS TO SAY, "HEY, KEEP YOUR MONEY HERE." IS THAT ACCURATE?

HODGE: EACH OF OUR CLIENTS IS GOING TO MAKE THEIR OWN DECISIONS AND WE WELCOME THEIR EVALUATION OF PIMCO. WE KNOW THAT IS PART OF THIS PROCESS AND WE WELCOME THOSE QUESTIONS AND WE WELCOME THOSE EVALUATIONS. AND ULTIMATELY, THEIR JUDGMENTS. WE ARE IN THE PROCESS OF SPEAKING WITH ALL OF OUR CLIENTS. OF REACHING OUT TO THEM, HAVING SPOKEN CONVERSATIONS, COMMUNICATING TO THEM THROUGH DIGITAL AND ELECTRONIC MEANS TO THE LITERALLY TENS OF MILLIONS OF INDIVIDUAL INVESTORS WHO HAVE PLACED THEIR TRUST IN THIS FIRM. AND THAT COMMUNICATION PROCESS IS WELL UNDERWAY.

SULLIVAN: YEAH AND LISTEN DOUG, MANY OF OUR VIEWERS AND LISTENERS RIGHT NOW ARE PROBABLY PIMCO CLIENTS OR THEY HAVE PIMCO FUNDS IN THEIR COMPANY 401(K), IN THEIR SCHWAB ACCOUNTS, WHATEVER IT MIGHT BE. WHAT IS YOUR MESSAGE TO THEM? SPEAK RIGHT NOW TO OUR VIEWERS AND SAY HERE'S WHY PIMCO IS STILL YOUR BEST BET?

HODGE: I THINK THE ANSWER IS VERY SIMPLE. WE ARE FOCUSED ON PIMCO'S FIRST PRINCIPLES. THE FIRST PRINCIPLES OF INVESTMENT PROCESS, DELIVERING SUPERIOR INVESTMENT PERFORMANCE, AND THE HIGHEST STANDARDS OF CLIENT SERVICE IN THE INDUSTRY. AND THAT IS WHAT PIMCO IS ABOUT AND THAT IS WHERE WE ARE GOING.

SULLIVAN: YOU KNOW, IT IS INTERESTING BECAUSE YOU LOOK AT THE HEADLINES AND OBVIOUSLY THIS IS THE WAY THE MEDIA WORKS, RIGHT DOUG? IS THAT BASICALLY, YOU'VE GOT SOMETHING THAT HAS HAPPENED, AND THAT IN THIS INDUSTRY, THIS WAS A HUGE DEAL. THIS IS THE BIG STORY FOR THE FINANCIAL SERVICES COMMUNITY. THE MAJORITY OF THE HEADLINES ARE NOT NECESSARILY POSITIVE FOR PIMCO. HOW DO YOU GET PASSED THAT? WHAT IS YOUR MESSAGE TO YOUR EMPLOYEES? WHAT IS YOUR MESSAGE TO YOUR INSTITUTIONAL CLIENTS ABOUT THE STABILITY OF PIMCO RIGHT NOW?

HODGE: WELL WITH RESPECT TO OUR EMPLOYEES, AND WE HAD A GLOBAL STAFF MEETING YESTERDAY, I WILL SHARE WITH YOU THAT YOU COULD JUST FEEL THE ENTHUSIASM. THE ENTHUSIASM AND THE OPTIMISM AMONG ALL OF OUR STAFF AROUND THE WORLD. WE HAVE 13 GLOBAL OFFICES, PEOPLE FROM ALL OVER THE WORLD ARE RESPONDING ACROSS OUR ENTIRE ORGANIZATION. WE ARE WORKING HARD AND WE ARE FOCUSED. SIMILARLY FOR OUR CLIENTS, THEY ARE ALSO RESPONDING. AS WE REACH OUT TO THEM, ONE BY ONE, CONVERSATION BY CONVERSATION, CLIENT BY CLIENT, THEY ARE REAFFIRMING THEIR COMMITMENT TO THIS ORGANIZATION AND WE ARE PROUD. WE ARE A PROUD ORGANIZATION, WE ARE STANDING BY OUR CLIENTS AND THEY ARE STANDING BY US.

SULLIVAN: I SPOKE WITH A FORMER INSIDER YESTERDAY, DOUG, WHO SAID BASICALLY THIS, THAT IT IS A WIN-WIN ACTUALLY, THAT BILL IS NOW GONE. BECAUSE, HE WAS A BRILLIANT INVESTOR, BUT NOT A GOOD LEADER. NOW THE FIRM CAN ADJUST TO A POST-BILL ERA, WOULD YOU DESCRIBE THIS AS A WIN-WIN?

HODGE: I WOULDN'T GO SO FAR AS TO SAY THAT. I WOULD JUST SIMPLY SAY THAT WE ARE MOVING FORWARD. WE HAVE ENORMOUS CONFIDENCE BEHIND DAN AND HIS TEAM. THEY ARE PROVEN INVESTORS, THEY ARE SKILLED INVESTORS, THEY HAVE SUPERIOR TRACK RECORDS AND THAT IS WHAT WE ARE ALL ABOUT HERE AT PIMCO.

SULLIVAN: OK, LAST QUESTION TO YOU DOUG WHICH IS THIS. AGAIN, A FRIEND OF CNBC, GREAT GUY, SMART GUY. BUT WHAT IS THE FUTURE OF PAUL MCCULLEY AT PIMCO?

HODGE: PAUL IS A VALUED COLLEAGUE AND A CLOSE FRIEND. HE HAS MADE IMPORTANT CONTRIBUTIONS TO THIS FIRM AND WE LOOK FORWARD TO HIS CONTINUING ENGAGEMENT AND OBVIOUSLY, BEING PART OF PIMCO FOR A LONG TIME.

SULLIVAN: SOUNDS LIKE HE IS STICKING AROUND THEN. FAIR ASSESSMENT? STICKING AROUND?

HODGE: EACH OF US MAKE OUR OWN DECISIONS, BUT WE OF COURSE – PAUL IS AN IMPORTANT PART OF PIMCO AND HE IS PART OF OUR TEAM.

SULLIVAN: LET US NOW GET TO PART TWO OF OUR EXCLUSIVE INTERVIEW WITH THE NEW LEADERSHIP TEAM AT PIMCO. DAN IVASCYN PROBABLY A NEW NAME FOR YOU GUYS IS THE NEW CHIEF INVESTMENT OFFICER BASICALLY THE MAN WHO IS TAKING OVER BILL GROSS AT THE TOTAL RETURN FUND FROM AN INVESTING PERSPECTIVE AND WE ASKED HIM BLUNTLY WHAT IS GOING TO BE DIFFERENT BETWEEN YOU AND BILL?

DAN WELCOME YOU ARE A NEW FACE TO MOST OF OUR VIEWERS AND PIMCO INVESTORS GREAT OPPORTUNITY TO GET IT OUT THERE WHAT IS YOUR INVESTING STYLE? HOW ARE YOU DIFFERENT FROM BILL GROSS' INVESTING STYLE AND WHAT ARE YOU GOING TO BRING TO THE TABLE?

DANIEL IVASCYN: SURE THANKS BRIAN. MANY OF THE VIEWERS KNOW I'VE TENDED TO FOCUS ON SOME OF THE HIGHER RETURN HIGHER RISK MANDATES WITHIN THE MUTUAL FUND SPACE THAT'S BEEN THE PIMCO INCOME FUND. THE STYLE THOUGH IS VERY SIMILAR AND I THINK IT IS IMPORTANT TO NOTE THAT PIMCO HAS A PRETTY LONG-STANDING, HIGHLY-STRUCTURED INVESTMENT PROCESS. AND EVEN THOUGH BILL GROSS IS NO LONGER WITH US WE PLAN TO USE THAT HIGHLY STRUCTURED PROCESS FOR US GOING FORWARD. IT HAS SERVED CLIENTS WELL EVEN THOUGH ALL OF US HAVE SLIGHTLY DIFFERENT INVESTMENT MANDATES WE ARE GOING TO CONTINUE TO BE VERY FOCUSED ON PERFORMANCE AND WE ARE VERY CONFIDENT GROUP THAT WE WILL BE ABLE TO CONTINUE DELIVER THOSE RETURNS THAT OUR CLIENTS EXPECT.

SULLIVAN: OKAY SO IF I HAVE MONEY LET'S SAY $100K IN A RETIREMENT ACCOUNT OR $100M FROM A PENSION FUND WHAT IS THE DIFFERENCE BETWEEN HOW THAT MONEY WILL BE MANAGED TODAY VERSUS A WEEK AGO OR A MONTH AGO DAN?

IVASCYN: SURE BRIAN. THE SHORT ANSWER IS THERE IS NO DIFFERENCE WE CONTINUE TO HAVE ABOUT 250 PORTFOLIO MANAGERS GLOBALLY. WE'RE CONTINUING TO USE THE SAME INVESTMENT COMMITTEE PROCESS THAT WE HAVE USED NOW FOR MANY MANY YEARS AND MOST IMPORTANTLY, WE CONTINUE TO BELIEVE IN THE CORE THESIS THAT WE'VE TALKED ABOUT OVER THE COURSE OF THE LAST FEW MONTHS. THAT'S THE NEW NEUTRAL CONCEPT. THE VIEW THAT INTEREST RATES GLOBALLY ARE GOING TO REMAIN LOW FOR AN EXTENDED PERIOD OF TIME SO AS A GROUP LOOKING ACROSS CLIENT PORTFOLIOS WE'RE COMFORTABLE WITH EXISTING POSITIONING. WE'RE FINE TUNING THE PORTFOLIO AS WE ALWAYS DO BUT AT LEAST FOR THE COMING WEEKS AND EVEN THE NEXT COUPLE OF MONTHS I EXPECT US TO BE VERY COMFORTABLE AND ONLY MAKE INCREMENTAL CHANGE ACROSS MOST CLIENT ACCOUNTS.

SULLIVAN: YOU KNOW DAN A LOT OF TALK ABOUT BILL'S STYLE AND SORT OF HOW HE WAS KIND OF OVER EVERYBODY ELSE AND SORT OF HAD HIS LITTLE UNIVERSE INSIDE OF PIMCO YOU HAVE BEEN THERE A LONG TIME AND YOU HAVE BEEN SUCCESSFUL DO YOU FEEL LIKE YOU ARE ABLE TO ACCOMPLISH ALL YOU WANTED TO FROM AN INVESTING STANDPOINT BEFORE LAST WEEK?

IVASCYN: I DO AND IT IS IMPORTANT TO NOTE THAT BILL GROSS WAS A BRILLIANT INVESTOR AND WE HAD THE MODEL IN PLACE THAT WAS A FOUNDER DRIVEN MODEL IN TERMS OF MANAGEMENT AND NOW WE AS A TEAM ARE GOING TO MOVE FORWARD WITH A MODEL BASED MORE ON TEAMWORK BUT I HAVE ALWAYS FELT THAT I HAVE BEEN ABLE TO OPERATE EFFECTIVELY AGAIN OUR PROCESS HAS A LOT OF STRUCTURE. WE ALL PARTICIPATE IN MAKING DECISIONS AND WE EXPECT THAT TO CONTINUE GOING FORWARD.

SULLIVAN: THE CRITICISM I GUESS WAS THAT PIMCO DIDN'T APPEAR ANYWAY FROM THE OUTSIDE WORLD BECAUSE IT WAS SO MUCH ABOUT BILL AND EVEN MOHAMED TO A POINT THAT YOU GUYS DIDN'T HAVE A DEEP BENCH. NOW YOU ARE THE CHIEF INVESTMENT OFFICER OF PIMCO GROUP HOW'S YOUR BENCH?

IVASCYN: OUR BENCH IS VERY DEEP BUT I THINK THAT MAY BE A MISCONCEPTION BECAUSE YOU ARE ABSOLUTELY RIGHT BECAUSE WE COMMUNICATED TO THE OUTSIDE WORLD THROUGH A COUPLE OF INDIVIDUALS BUT WE HAVE MORE PORTFOLIO MANAGERS ON OUR TEAM TODAY THAN EVER BEFORE. WE HAVE ADDED 25 SENIOR PORTFOLIO MANAGERS TO THE TEAM JUST THIS YEAR. AND ACROSS ALL OF THE PRODUCTS THAT WE MANAGE WE HAVE A VERY VERY DEEP BENCH AND I CAN'T STRESS ENOUGH THAT THE MACRO THESES THE DECISIONS REGARDING PORTFOLIO CONSTRUCTION TRULY ARE THE BEST IDEAS FROM THIS VERY DEEP TEAM AT PIMCO. THAT'S THE WAY IT WAS A COUPLE OF WEEKS AGO IT IS THE WAY IT IS GOING TO BE GOING FORWARD AND I BELIEVE MY ROLE ULTIMATELY AT THE END OF THE DAY IS TO CREATE AN ENVIRONMENT THAT ALLOWS FOR GOOD DECISION MAKING. AND WE'RE GOING TO BE VERY VERY FOCUSED ON CLIENT RETURNS GOING FORWARD. WE ALWAYS HAVE BEEN HERE AT PIMCO AND THAT'S GOING TO BE THE KEY FOCUS OF NOT ONLY THE MANAGEMENT TEAM BUT EVERY OTHER INDIVIDUAL WITHIN THE PORTFOLIO MANAGEMENT AREA.

SULLIVAN: I ASSUME DAN YOU HAVE ALSO BEEN HEARING FROM SOME BIG CLIENTS. WHAT ARE THEY TELLING YOU? WHAT ARE THEY ASKING?

IVASCYN: THAT'S RIGHT I HAVE BEEN SPENDING A LOT OF TIME PARTICULARLY OVER THE WEEKEND REACHING OUT TO NOT ONLY OUR LARGE CLIENTS BUT TRYING TO COMMUNICATE TO THE MILLIONS OF SMALL INVESTORS AS WELL AND THE FEEDBACK THAT WE'VE HAD HAS BEEN POSITIVE PRETTY MUCH ACROSS THE BOARD. OUR CLIENTS ARE WILLING TO REASSESS THE SITUATION AND WE'RE INVITING OUR CLIENTS TO COME BY OUR OFFICES HERE AT NEWPORT BEACH OR AROUND THE GLOBE AND GET TO KNOW US A LITTLE BIT BETTER BECAUSE WE ARE HIGHLY CONFIDENT THAT AFTER THEY DO THAT THEY'LL BE VERY PLEASED WITH OUR STRUCTURE. AND THEN WHAT'S MOST IMPORTANT AT THE END OF THE DAY AS YOU KNOW ARE INVESTMENT RESULTS AND AS DOUG MENTIONED I AM SURROUNDED NOW BY A TEAM OF INDIVIDUALS THAT ARE PART OF THE MANAGEMENT PROCESS THAT HAVE INCREDIBLE TRACK RECORDS WE'VE WORKED WELL TOGETHER IN SOME CASES FOR 15 YEARS AND WE ARE VERY COMMITED TO CONTINUING THAT TRADITION THAT BILL IS LEAVING US WITH OF STRONG INVESTMENT PERFORMANCE.

SULLIVAN: OK ONE MORE TO YOU AND THEN ACTUALLY DOUG YOU READY I HAVE TWO MORE COMING TO YOU AT THE END ABOUT THE EQUITIES BUSINESS BUT FIRST OFF DAN THE ONE THING WE HOPE TO SEE A LOT ON STREET SIGNS AND CNBC BY THE WAY GOING FORWARD AND WE LIKE TO PUT PEOPLE ON THE SPOT ABOUT NUMBERS. I AM GOING TO ASK YOU THIS. WHEN DO YOU THINK THE NEXT TIME WE WILL SEE A 3% YIELD ON A TEN YEAR TREASURY WILL BE?

IVASCYN: AGAIN, IT WILL LIKELY BE AT SOME POINT OVER THE NEXT FEW YEARS. BUT AS I MENTIONED EARLIER BASED ON OUR MACROTHESIS WE THINK INTEREST RATES ARE GOING TO REMAIN PRETTY WELL BOUNDED. LOOKING AT THE TEN YEAR YIELD TODAY WE THINK IT OFFERS REASONABLE VALUE GIVEN OUR INVESTMENT THESIS. NOT TREMENDOUS VALUE BUT REASONABLE VALUE.

SULLIVAN: WHAT DOES GIVE YOU VALUE RIGHT NOW DAN? WHAT DOES YOUR TEAM SEE VALUE IN?

IVASCYN: IN TERMS OF SOME OF THE MARKET MOVEMENTS OVER THE LAST FEW WEEKS WE ARE BEGINNING TO SEE A BIT MORE VALUE IN CERTAIN AREAS OF THE EMERGING MARKETS. BRAZIL FOR EXAMPLE IS AN AREA THAT'S UNDERPERFORMED OF LATE. MEXICAN INTEREST RATES ARE ANOTHER AREA THAT WE HAVE BEEN CONSTRUCTIVE ON BUT WHICH IS BEGINNING TO OFFER EVEN MORE VALUE. THE OTHER KEY THEME THAT WE'VE BEEN FOCUSED ON AND FORTUNATE ENOUGH TO BENEFIT FROM HAS BEEN DOLLAR STRENGTH. WE DO THINK OVER THE COMING MONTHS WE WILL CONTINUE TO SEE DOLLAR STRENGTH RELATIVE TO A LOT OF THE GLOBAL CURRENCIES AND THAT WILL CONTINUE TO BE A KEY THEME FOR CLIENT PORTFOLIOS GOING FORWARD.

SULLIVAN: I NOTICE A LITTLE TWINGE OF SMILE THERE WHEN YOU REALIZED I WAS ASKING INVESTMENT QUESTIONS RATHER THAN ABOUT THE BILL GROSS ERA. WE LIKE THAT DAN WE HOPE TO SEE YOU AGAIN. DOUG HODGE BACK TO YOU JUST VERY QUICKLY, THE EQUITIES BUSINESS, KIND OF A CURIOUS SIDE TO PIMCO. A LOT OF PEOPLE DON'T TALK ABOUT IT. REPORTS ARE THAT BILL WAS PLAYING A HAND IN THAT. WHAT IS THE FUTURE OF THE EQUITIES, THE STOCK BUSINESS AT PIMCO? GROW IT? SHUTTER IT?

HODGE: ABSOLUTELY GROW IT BRIAN. GROW IT. I THINK WHAT'S PERHAPS NOT WELL UNDERSTOOD ABOUT PIMCO IS THAT WE HAVE ACTUALLY BEEN IN THE EQUITY BUSINESS FOR NEARLY 20 YEARS WITH SOME OF OUR ENHANCED PASSIVE STRATEGIES, OUR BETA PLUS STRATEGIES. AND WE'VE DELIVERED SUPERIOR RESULTS THROUGH THOSE PRODUCTS. WITH RESPECT TO ACTIVE EQUITIES WHICH I THINK YOU ARE REFERRING TO WE ARE ABSOLUTELY COMMITTED TO THAT BUSINESS. IT IS AN IMPORTANT PART OF OUR WAY FORWARD AS WE EVOLVE PIMCO TO A MULTI ASSET MULTI STRATEGY FIRM. THAT HAS BEEN UNDERWAY FOR REALLY THE LAST DECADE BUT CERTAINLY ACTIVE EQUITIES WILL PLAY AN IMPORTANT PART OF THAT.

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