Monday, November 2, 2015

Bill Gross at Janus: Loses $500 Million account

It looked like a great opportunity. 

Bill Gross, the world's best bond manager for several decades, left the firm he built leaving hundreds of billions of managed assets behind.

He started fresh running a very small fund.

Smart guy + small money = great capacity to move swiftly among opportunities without having to create large positions to make outsized returns.

It didn't happen after one year.   Is it like Michael Jordan retiring from the Bulls, but coming back to play with the Wizards?

Gross is still one of the smartest investment guys around.

His ongoing success is probably a matter of drive, focus and determination.  He has a lawsuit against his old firm.  That's the kind of distraction that can distort motivation.    PB
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From Pensions and Investments magazine online:

An unidentified institutional investor redeemed nearly $500 million from the unconstrained global bond strategy managed by Janus Capital Group Inc.'s William H. Gross during the quarter ended Sept. 30, slicing about 23% of assets from the strategy.

The withdrawal marks a setback for Mr. Gross, who joined Janus in late September 2014 after an abrupt exit from Newport Beach Calif.-based Pacific Investment Management Co., the firm he co-founded four decades ago.

Since taking the helm of Denver-based Janus' Global Unconstrained Bond Fund and associated portfolios, initial inflows have turned into recent net redemptions.

At the time of his departure from PIMCO, Mr. Gross was managing the world's largest bond fund, the Total Return Fund, which then had $201.5 billion in assets. He also headed the smaller $18.3 billion PIMCO Unconstrained Bond Fund.

Issues apparently remain unresolved regarding his departure from PIMCO; a month ago, Mr. Gross filed a lawsuit against PIMCO, claiming that he was forced out of the firm.

When Mr. Gross arrived at Janus, the unconstrained bond fund, launched in May 2014, held about $13 million in assets.

In November 2014, about a month after Mr. Gross' arrival, Janus announced that a private vehicle managed by Soros Fund Management LLC had invested $500 million in a separate account managed by Mr. Gross that would follow the global unconstrained bond fund strategy.

By April 2015, the fund reached a peak $1.514 billion in mutual fund assets, according to data from Chicago-based Morningstar.

But that amount also included about $700 million of Mr. Gross' own money. To be clear, that total does not include the $500 million from Mr. Soros' fund...
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Link: http://www.pionline.com/article/20151102/PRINT/311029974/big-redemption-marks-end-of-gross-1st-year

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