In fact, Betabeat has learned, one of the most significant players in the financial world has already begun testing the waters. Stake in PIMCO, the closely-watched asset manager with over $1.2 trillion under its control, has been quietly selling on SecondMarket, according to a source familiar with the deals.
Speculation has swirled in recent months about a growing rift between PIMCO and its parent company Allianz. News that PIMCO was trying to launch its own brokerage biz right here in New York led to rumors of a further split or even a public offering.
“PIMCO, with Bill Gross running the show, has been enjoying an extraordinary run,” said fund consultant Burton Greenwald. “They are feeling their oats, and probably beginning to resent the kind of compensation they get with Allianz as a parent.”
Instead of waiting for the payday of a public offering, employees are cashing out by selling on SecondMarket. “If you wanted to play Devil’s Advocate you would say they are looking to get out while they’re on top,” chuckled a banking exec. “Bill Gross is not a guy who leaves money on the table, so if he’s doing this, he must feel like he can extract the most value this way.”
SecondMarket matches buyers and sellers looking to trade in illiquid, restricted or alternative investments. Its attracted a lot of attention this year for its trade in private shares of the world’s hottest tech firms. In doing so it has also attracted an ongoing inquiry from the SEC, which is concerned these firms are using secondary markets to skirt disclosure regulations.
When asked for comment, SecondMarket spokesman Matt Murphy would neither confirm nor deny that PIMCO was being traded.
“The thing people don’t realize about SecondMarket, it’s not about fucking Facebook and Twitter stock,” said a source close to the company, who confirmed that several PIMCO employees were selling on SecondMarket. “It’s about all the companies that are looking for structured liquidity who are beginning to see this as an attractive option.”
It would be a game-changer in the world of asset management if company equity could be bought and sold on the secondary market. “The norms of equity in the tech market are so different,” says Eric Jacobson, a PIMCO analyst at Morningstar. “People expect that web entrepreneurs will look to cash in their stake. In the world of asset management, it’s a much more fragile construct. It’s very people-oriented. The most common refrain you will hear is, the assets of this company get on the elevator and walk out the front door to go home every night.”
With a little help from SecondMarket, the equity may soon be leaving the company, even if the employees stay glued to their desks.