PIMCO has scrapped plans to launch its Australian listed investment trust (LIT), the PIMCO Global Income Opportunities Trust over “insufficient demand”, it confirmed in a statement on Monday.
The fixed income investment manager said demand was impacted by “residual investor concerns” around the historical secondary market trading performance of segments of the LIT sector in the local market.
“In the current market environment, the level of demand did not give us confidence that the product would trade strongly in the secondary market,” said Rob Mead, head of PIMCO Australia and co-head of Asia-Pacific portfolio management.
“We therefore decided it would be in the best interests of investors not to proceed with the listing,” Mr Mead explained.
The PIMCO Global Income Opportunities Trust was poised to be PIMCO’s first listed investment trust for Australian investors.
The investment manager, with US$2.2 trillion in assets under management (AUM) as of 31 December, promised a 4.75 per cent to 5.75 per cent yield target.
The objective was to provide attractive risk-adjusted returns and current income by investing predominantly in a portfolio of globally sourced fixed interest securities, including government and government-related debt, corporate debt, mortgage-related and other credit securities of varying maturities.
On Monday, however, Brendon Rodda, head of distribution, global wealth management in Australia, said: “This experience highlighted that there is strong demand for this kind of strategy, albeit the preference is for an unlisted structure”.
“PIMCO will therefore focus on expanding our footprint in this sector of the market to bring our expertise in alternative credit solutions to deliver much needed income to Australian investors.”
PIMCO has 50 years’ experience in fixed income investing and has been operating in Australia since 1997.
Maja Garaca Djurdjevic
Maja's career in journalism spans well over a decade across finance, business and politics. Now an experienced editor and reporter across all elements of the financial services sector, prior to joining Momentum Media, Maja reported for several established news outlets in Southeast Europe, scrutinising key processes in post-conflict societies.
