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PIMCO tells OHA trustees TacOps’ flexibility can help in a volatile market
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Summary
PIMCO briefed the Office of Hawaiian Affairs trustees on geopolitical, AI and credit risks and described how its Tactical Opportunities fund’s mixed public/private credit approach positions it to take advantage of market dislocations.
Kevin Gray of Pacific Investment Management Company (PIMCO) told the Office of Hawaiian Affairs Committee on Investments and Land Management on April 1 that PIMCO manages about $2.2 trillion in assets and that the firm’s recent cyclical forum identified geopolitical shocks, AI disruptions and credit pressures as key near‑term themes.
Bill Murphy, also from PIMCO, said the war in Iran is the dominant geopolitical shock and could push oil prices higher, creating stagflation risks for policymakers. Murphy listed three topics the firm is monitoring: the geopolitical shock, AI‑driven sector dislocations and localized stress in private credit funds. “If this conflict continues, you could have oil go even higher than it is today,” Murphy said, describing the tail risk for growth and markets.
PIMCO described the Tactical Opportunities (TacOps) fund as a flexible credit strategy that currently holds about 60% public credit and 40% private credit, with roughly 10% liquidity. Kevin Gray said the fund’s preliminary net performance year‑to‑date was “up about 9%,” noting that final numbers were not yet official. PIMCO said TacOps’ mix of hard‑asset and specialty finance exposure has helped it take advantage of recent market dislocations.
During trustee questions, PIMCO emphasized that growing OHA’s corpus toward $1 billion depends on a combination of spending‑policy choices, agreed risk tolerance and governance that allows use of diversified tools, including private markets and liquidity management. When asked whether recent March market events change portfolio posture, PIMCO said the best approach is pre‑planning and maintaining flexibility to be a provider of capital during dislocations rather than making abrupt shifts.
Trustees also asked about cryptocurrency and tokenization. PIMCO described crypto as a highly volatile asset with limited institutional uptake and recommended that any allocation be small and carefully governed. “It’s a tool in the toolkit,” Kevin Gray said, adding that institutions should assess whether and how tokenization or related technologies fit their specific portfolio objectives.
The trustees thanked the presenters and asked for follow‑up performance reporting for Tactical Opportunities through the first quarter.
The committee moved on to land‑use agenda items after the investment briefing.
