Former TCW executives Jeffrey Gundlach and Philip Barach launched a new investment management firm, DoubleLine, the pair announced today.
Private equity manager Oaktree Capital Management, set up by other former TCW investors more than a decade ago, will help DoubleLine establish its own operational infrastructure under a strategic relationship also announced today. In return, Oaktree will receive a minority equity position in DoubleLine.
In a telephone interview, Mr. Gundlach said the size of Oaktree’s stake in DoubleLine isn’t being disclosed. However, he said everyone who has signed on to the DoubleLine team now — including more than 30 former members of Mr. Gundlach’s mortgage-backed securities investment team at TCW — will own equity. The goal is “alignment of interest and motivated employees,” all aimed at creating a firm dedicated to performance and client service excellence, Mr. Gundlach said.
In an e-mailed response to questions, TCW spokeswoman Erin Freeman confirmed that more than 30 members of Mr. Gundlach’s TCW team have left the firm.
Mr. Gundlach predicted that by the end of the day on Dec. 15, the DoubleLine team would expand to 50, with 45 of that total coming from TCW.
Mr. Gundlach said DoubleLine now has seven principals. He will serve as CEO and Mr. Barach, former group managing director of the TCW mortgage-backed securities group, will serve as president.
Other principals include the senior portfolio managers on Mr. Gundlach’s old TCW team — Joel A. Damiani, Joseph J. Galligan, Louis Lucido and Greg Ward — as well as one newcomer Mr. Gundlach said will serve as chief operating officer; he declined to name the newcomer.
DoubleLine will manage core and mortgage-backed fixed-income portfolios.
DoubleLine has started the process of registering as an investment adviser with the SEC, and pending the approval of its application, the firm “will conduct its business within the limits established by the Investment Advisers Act of 1940,” the news release said.
In the news release, both Mr. Gundlach and Oaktree Chairman Howard Marks suggested their firms could work together on shared product offerings in the future.
In her e-mailed response to questions, TCW’s Ms. Freeman said “TCW is focused on managing our clients’ high-grade fixed-income portfolios and completing the MetWest acquisition,” which leaves TCW with fixed-income capabilities as good as any in the industry. Saying TCW will regard Mr. Gundlach as it would any other competitor, she added: “We expect that Mr. Gundlach and his new firm will respect their obligations and not use any of TCW's proprietary information or platforms.”
Mr. Gundlach said his new firm isn’t using any proprietary information. “My approach is called thinking” and in an investment environment likely to get ugly again soon after the “easy money” made in 2009, that’s an approach that will be needed, he added.
