By Ross Kerber
CHICAGO (Reuters) - Pimco's chief executive officer said on Friday that improving flow trends showed the big bond firm is regaining client confidence after the departure of star manager Bill Gross last year led to billions of dollars of withdrawals.
Outflows at the flagship fund once managed by Gross, Pimco Total Return, slowed to $2.7 billion in May, the smallest of any month since Gross left last September, according to the most recent data from Lipper, the Thomson Reuters unit.
"We recognize that the organizational changes that have taken place at Pimco over the last 18 months have created change and created uncertainty and anxiety" among clients, CEO Douglas Hodge said at the Morningstar Investment Conference in Chicago.
But those jitters have diminished and led to better flow patterns, Hodge said, helped by steady performance. "As we look at the last two or three months, we're starting to see the arrows come back up. I think that's the resolution of the uncertainty," he said.
With $1.7 trillion in assets under management, Pimco, of Newport Beach, California, remains one of the most influential fixed income managers.
But assets are down from a peak of around $2.1 trillion two years ago, hurt by investor withdrawals after Gross' surprise announcement that he would leave the firm he founded for Janus Capital Group Inc (N:JNS).
Among Pimco's 108 other mutual funds tracked by Lipper, outflows slowed to $1.9 billion in May, the smallest for any month since Gross left.
For the period after Gross left, from October 2014 to May 2015, Total Return had an annualized return of 2.58 percent, beating 66 percent of peers, according to Morningstar. The fund has about $107 billion in total assets.
Gross was outspoken, leading to tensions within Pimco before his departure. Speaking on the same stage as Hodge at Friday, Pimco Chief Investment Officer Daniel Ivascyn said the company now aims to gather more input into investment decisions from among its 250 portfolio managers.
"We are going to try to listen a bit more," Ivascyn said.
Pimco, formally known as Pacific Investment Management Co, is a unit of Germany's Allianz SE (DE:ALVG).