Pimco fees come under scrutiny

WITH the trading desks of investment banks cut to the bone, the ability to pin a fat fee on a fast-growing pile of assets has become the holy grail for financial firms.

Few have proved better at this than the bond giant Pimco and its total return fund, which took in more than US$6 billion in fees between 2010 and 2013 - the most profitable run ever for a mutual fund.

But as Pimco copes with an exodus of cash from its largest fund after the departure of its co-founder William Gross, these fees - and in particular, their composition - are drawing scrutiny.