As CEO, this was Mohamed El-Erian’s mandate: find where Pimco could expand. He planned to bring the diversified-portfolio approach he’d overseen at Harvard Management Company to Pimco, by spreading money across products with different types of risks, the sum of which should have a lower overall risk profile than if all the investment eggs were in one basket. Pimco was definitionally heavy in the bond basket, which had just experienced an unprecedented run-up.
