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PIMCO's Toloui Treasury-Bound, Steps Down From 2 Funds

Robert Goldsborough

On Thursday, President Obama nominated PIMCO global co-head of Emerging Markets Portfolio Management Ramin Toloui to return to the United States Department of Treasury in a high-level post.

According to a release from the White House, if confirmed by the Senate, Toloui, 39, would become Deputy Under Secretary for International Finance and also upon his appointment would be designated Assistant Secretary for International Finance. With Toloui's nomination now pending before a Senate committee that must vote to forward his nomination to the full Senate, he stepped down today from being a named portfolio manager on two U.S. mutual funds: the $5.9 billion, Gold-rated PIMCO Emerging Markets Bond (PAEMX) and the $3.1 billion, Bronze-rated PIMCO Global Advantage Strategy Bond (PGSAX).

PIMCO did not announce any replacements for Toloui on any of the funds on which he has been a named portfolio manager, so barring any further announcements, his comanagers will cover his responsibilities. The two funds have other senior-level managers working on them. In addition to PIMCO Emerging Markets Bond and PIMCO Global Advantage Strategy Bond, Toloui also has helped to manage the $39 million PIMCO Emerging Multi-Asset (PEAAX).

This wouldn't be the first time that Toloui, who holds degrees from Harvard and Oxford, has served in the Treasury Department. From 1999 until 2006, he held a variety of positions in the department, including Deputy Director and International Economist in the Office of Central and Southeastern Europe, Senior Advisor to the Under Secretary for International Affairs, and Director of the Office of the Western Hemisphere.

In 2006, Toloui joined PIMCO as a portfolio manager for emerging markets, and he added responsibility for global bond portfolios in 2009. He became PIMCO's global co-head of its Emerging Markets Portfolio Management in 2011 and began chairing the firm's Asia-Pacific portfolio committee in 2012.

It's not clear if Toloui's decision to leave and join the Treasury Department is at all related to the recent turmoil at PIMCO and the departure of PIMCO CEO and co-CIO Mohamed El-Erian.

While Toloui strikes us as a noncontroversial nominee, Senate confirmations thus far this year--even of relatively uncontroversial nominees such as ambassadors--have proceeded at a very slow pace. Republican senators have refused to allow blanket confirmations of uncontroversial administration and judicial nominees after Democratic senators late last year eliminated the use of the filibuster for nominees. As a result, more than 140 nominees currently are sitting on the Senate's executive calendar awaiting floor action, and in recent months, Republican senators generally have been allowing consent to confirm only a handful of nominees at most each week. To get more nominees than that confirmed, Democratic Senate leaders must use a time-consuming process known as gaining cloture, which soaks up precious floor time that could also be used on legislation.

If confirmed, Toloui would fill the seat vacated by his fellow Oxford University alumnus Charles Collyns, who left the Treasury Department last summer to become the managing director and chief economist of the Institute of International Finance. Collyns previously had spent many years at the International Monetary Fund.

Robert Goldsborough does not own shares in any of the securities mentioned above.