According to reports in the US, bond giant Pimco is looking to build its global equity capabilities by hiring an entire team.

A report on the Pensions & Investments (P&I) website says the global teams of Colonial First State, Morgan Stanley IM, Evergreen Investments and UBS AM are all possible targets for the Newport Beach-based firm headed up by Bill Gross and Mohamed El-Erian (above).

Anonymous industry sources reportedly told P&I that Pimco has its eye on those teams with strong track records who are at firms that have been weakened during the economic turndown. P&I says Pimco is unlikely to consider outsourcing its global equity capacity due to the costs involved and because it will want to ensure the funds' investment process is in line with its own.

Pimco's plans to expand into the active global equity arena could raise interesting issues with parent company Allianz, whose fund management arm already has establised expertise in the area.

It makes one wonder, as the world's largest bond manager - with some $840 billion of AUM - does Pimco think the equity market is the only way for it to continuing growing significantly? Or has Bill Gross always harboured a desire to test his skills in the equity market?

Either way, the suggestion that such a major player is setting its sights on the active equity space should give Europe's asset managers something to think about. The rise of ETFs and the encroachment of hedge funds into the Ucits III space have already increased competition for clients, and Pimco could be looking to join an increasingly crowded playing field.