Pimco Co-Founder Bill Gross. Investors pulled $150.2 billion from Pimco’s U.S. mutual funds in 2014, a year during which it lost both of its co-chief investment officers, Gross and Mohamed El-Erian. Photographer: Andrew Harrer/Bloomberg

(Bloomberg) — Pacific Investment Management Co. saw assets decline about 10 percent in the fourth quarter as the abrupt departure of co-founder Bill Gross prompted client withdrawals.

Assets fell to $1.68 trillion from $1.87 trillion at the end of September, according to information posted on Pimco’s website. Its Pimco Total Return Fund, the world’s biggest bond fund, has shrunk to $143.4 billion from $222 billion at the end of August, the month before Gross left, and $293 billion at the peak in April 2013.

The firm, based in Newport Beach, California, suffered the worst year of withdrawals in the history of fund management amid a leadership shakeup and as performance at some strategies stumbled. Investors pulled $150.2 billion from Pimco’s U.S. mutual funds in 2014, a year during which it lost both of its co-chief investment officers, Gross and Mohamed El-Erian.

Pimco is seeking to reassure investors and stem redemptions, bringing back high-profile money managers and naming top performers to run its largest funds.

The Total Return Fund, which was once the biggest U.S. mutual fund, is now the fourth-largest as offerings from Vanguard Group Inc. have overtaken it, according to data compiled by Bloomberg. The decline has erased more than five years of growth at the fund, bringing assets to 2008 levels.

Investors started pulling their money from Pimco Total Return in May 2013 as they sought alternatives to traditional fixed income investing amid concern the Federal Reserve would curb stimulus and interest rates would rise.

Total Return trailed a majority of peers for the second straight year in 2014 after missing a rally in longer-term bonds and betting that inflation would rise. The fund returned 4.7 percent, trailing 53 percent of comparable funds, according to data compiled by Bloomberg.

Gross unexpectedly left the firm on Sept. 26 to join Janus Capital Group Inc. later telling Bloomberg View’s Barry Ritholtz he was dismissed after clashing with management and offering to take a reduced role.

To contact the reporter on this story: Josh Friedman in Los Angeles at jfriedman25@bloomberg.net

To contact the editors responsible for this story: Christian Baumgaertel at cbaumgaertel@bloomberg.net Josh Friedman