Will Bill Gross’s departure from PIMCO net profits for Janus?



Bill Gross is a legend in bond mutual fund management

Many financial publications last week covered the departure of the legendary bond mutual fund manager Bill Gross from Pacific Investment Management Company, LLC (or PIMCO) to join Janus Capital (JNS).

Mr. Gross was synonymous with PIMCO and his departure also came as a shock to the industry. What are the implications of this change for both PIMCO and Janus Capital? Will Mr. Gross be able to repeat his fabled performance at Janus? This series will take a closer look at these questions.

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Bill Gross started his career at Pacific Mutual Life in Los Angeles in 1971. Prior to joining the investment industry, he served in the navy and earned his MBA from University of California, Los Angeles. He founded PIMCO in 1982, which gained in stature in the first decade of the 21st century. Mr. Gross correctly predicted the dot-com bubble and the mortgage crisis. As of June 30, 2014, PIMCO had $1.97 trillion in assets under management.

The Total Return Fund is the largest bond fund in the world

Mr. Gross outperformed fixed income benchmarks over more than 20 years, growing PIMCO into the behemoth asset manager it is today. Mr. Gross built the Total Return Fund (PTTPX) into the world’s largest bond fund, which at its peak in April 2013 had nearly $293 billion in assets. However, as assets under management grew, it was harder for Mr. Gross and his team to maintain outperformance.

Mr. Gross’s departure from PIMCO will likely shake up the industry and all players, big or small, like BlackRock (BLK), JP Morgan (JPM), and Legg Mason (LM).


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