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Former UK PM Gordon Brown to join Pimco as adviser

PIMCO headquarters building in Newport Beach, Calif.
Scott Mlyn | CNBC
PIMCO headquarters building in Newport Beach, Calif.

The former UK prime minister Gordon Brown has taken his first major role in the private sector since leaving Downing Street more than five years ago, becoming an adviser to Pimco, one of the world's largest asset managers.

Mr Brown is joining a new Pimco board chaired by another public servant-turned-corporate adviser, the former Federal Reserve chairman Ben Bernanke, designed to provide its investment managers with international economic and policy insights.

As such, Mr Brown will attend regular board meetings and make an annual speech to the company's "secular forum", which sets long-term investment strategies.

He joins other heavyweight former public officials on the board, including the former president of the European Central Bank, Jean-Claude Trichet, and Ng Kok Song, who was chief investment officer of Singapore's sovereign wealth fund until 2013.

A spokesman for the former prime minister said: "Mr Brown is looking forward to discussing economic events and trends again with Ben Bernanke, Jean-Claude Trichet, Anne-Marie Slaughter [international lawyer and policy expert] and others."

The spokesman added: "Any money goes to the Office of Gordon and Sarah Brown to support their charitable and public service work. Mr Brown does not receive a penny."

Pimco did not disclose what it will pay for Mr Brown's advisory role, but it is likely to be multiples of the fee he received for a one-off speech at Pimco's headquarters in Newport Beach, California, in 2011: £36,174 plus £12,484 in flights and accommodation for the former prime minister and a member of staff.

Mr Bernanke netted a seven-figure sum for joining Pimco earlier this year, according to people familiar with the company.

Mr Brown has declared more than £3.6m of payments from an array of outside interests since leading the Labour party to defeat in 2010 in the wake of the financial crisis.

A book he authored called Beyond the Crash made £78,289 which he gave to charity.

He has also registered sums of up to £62,000 received for speeches to events hosted by companies ranging from Credit Suisse in Miami to Visa International in Singapore.

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Since quitting as a member of Parliament in May, he is no longer obliged to disclose his various earnings.

Mr Brown was one of the key figures in the rise of "New Labour" as an electoral powerhouse in Britain, winning three general elections in a row in part by cultivating a close relationship with the City of London. As chancellor of the exchequer, he had a tempestuous relationship with Tony Blair, the then prime minister, who he finally succeeded in 2007.

Mr Blair has gone on to make a small fortune working for companies and countries through his own advisory firm, Tony Blair Associates.

TBA's clients include countries such as Peru, Colombia, Kuwait, Vietnam and Kazakhstan as well as companies including JPMorgan, Zurich, UI Energy Corporation, Mubadala and PetroSaudi, an oil company with links to the Saudi royal family.

For Pimco, which manages $1.5tn of assets, mainly in the bond markets, a heavyweight advisory board is a means of wowing clients and insisting it retains its clout despite the traumatic exit of its founder Bill Gross last year.

The Pimco role is Mr Trichet's first in the finance industry since stepping down from the ECB in 2011, although he is on the board of Airbus and has taken several positions in international think tanks.

The ECB has come under fire over its close links between senior staff and the financial sector, and last week changed its rules on meetings between private sector officials and policymakers.