Pimco's long courtship of Greenspan pays off

Bill Thompson, the chief executive of Pacific Investment Management Co., was so eager to hire Alan Greenspan that he did something unusual last September.

He wrote the former Federal Reserve chief a letter. By hand.

The missive so struck Greenspan that he phoned Thompson immediately.

"He said, 'I couldn't resist calling you because it's seldom that I get a letter like this,' " Thompson recalled Wednesday.

It was a small gesture in an aggressive yearlong courtship that paid off this week when Pimco disclosed that it had hired the much-sought-after Greenspan as an outside consultant.

Greenspan will advise the Newport Beach-based bond fund giant on economic and monetary policy in his first consulting gig since he left the Fed in January 2006. Pimco manages nearly $700 billion in assets, mostly in fixed-income securities, so accurate forecasting of interest rate trends is key to the company's investment success.

The 81-year-old Greenspan is in high demand. He has received numerous offers from investment banks, hedge funds, private equity shops and others on Wall Street and in corporate America, according to people close to him.

"When Dr. Greenspan left the Fed, he received more offers than I've ever received for anybody other than former President Clinton," said Robert Barnett, a lawyer for the ex-Fed chief. "It seems that everyone would like him to be part of their efforts."

Greenspan, through a spokeswoman, declined to comment. Pimco would not disclose the terms of its accord with Greenspan, except to say it was a multiyear deal.

An economic consultant early in his career, Greenspan brings two things to Pimco: unmatched credentials in divining economic currents and -- perhaps more important -- marketing cachet.

The former Fed chairman will visit Newport Beach four times a year for quarterly forecasting sessions, Thompson said. He'll also consult regularly with Pimco investment managers, including Bill Gross, who runs the flagship Total Return bond fund.

The fund, which is up 1.3% this year, has trailed most of its peers for much of the last year, according to Morningstar Inc.

That's partly because of Gross' caution about the economy. He has been unwilling to bet heavily on high-yielding corporate bonds because he believes they aren't worth the risk that they will lose value if the U.S. economy slows further.