The Business On... Mohamed El-Erian, Chief executive, Pimco
Friday 06 August 2010
What does he have to say for himself?
Just that there's a good chance the US economy, the world's largest, is heading for a double-dip recession and a period of deflation. He's not certain but he's worried.
He puts it like this: "If you wonder how meaningful 25 per cent is, ask yourself the following question: if I offered you that I drive you back to work, but there's a one in four chance that I get into a big accident, would come with me?"
Should we take notice?
Well, Mr El-Erian does run the world's largest bond fund, which means he is in charge of $1trillion worth of assets. He's a man who knows a thing or two about markets and economies.
But aren't these Wall Street types always making bold statements?
Actually, Pimco is based in Newport Beach, California, and Mr El-Erian has never worked on Wall Street. Before this job he ran a $35bn endowment fund on behalf of Harvard University.
So what's his background?
He's the son of an Egyptian diplomat but was actually educated in Britain – at a school in Leatherhead. He did his first degree at Cambridge and then
got his PhD from Oxford.
A bright chap then?
Did I mention his fluency in English, French and Arabic?
No wonder he cashed in.
He didn't. In fact, he made his name at the International Monetary Fund, where he became something of an expert on emerging market debt. Eventually, in 1999, he moved to Pimco, where he rapidly became one of its brightest talents. The Harvard appointment in 2005 was a surprise, but the fund's returns were stellar under his management – one reason why Pimco asked him to come back three years later.
And he's still doing well?
Pimco thinks so, and you can't fault his work ethic. He's in the office at 5am, and he's made a series of brave but good calls for the firm.
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