Star money manager Jeffrey Gundlach's wealth and ego are on trial in a Los Angeles courtroom.
While officially the case against the fired TCW Group Inc. chief investment officer involves charges that Mr. Gundlach and his associates stole trade secrets to help start rival money management firm DoubleLine Capital LP, TCW's attorneys are attempting to paint Mr. Gundlach as greedy and conceited.
During their questioning of witnesses, including Mr. Gundlach, TCW's attorneys brought up the fact that he earned more than $40 million in 2009, twice as much as any other TCW employee, including CEO Marc Stern.
“I actually should have made more than that during that year,” Mr. Gundlach responded to TCW attorney John Quinn in one courtroom exchange.
Mr. Gundlach also disclosed his net worth is $90 million.
The star fixed-income manager, who was fired in December 2009, said he was upset when his ownership interest in TCW was reduced after Societe Generale Group purchased TCW in 2001. But Mr. Gundlach testified he made $58 million from the sale of his stake.
Mr. Gundlach was on the witness stand for four days, and e-mails revealed during those days have put his ego on display.
In one, he expressed displeasure that Mr. Stern and Chairman Robert Day had met with his co-portfolio manager of two decades, Philip Barach, believing the pair was possibly preparing to have Mr. Barach run the mortgage-backed securities portfolio solo if Mr. Gundlach were terminated.
In an e-mail to Barbara VanEvery, a TCW vice president at the time, Mr. Gundlach wrote he was upset that the pair met with Mr. Barach, saying Messrs. “Stern and Day spent the late afternoon calling my B team to sweet talk them.”
”Who's your B team?” TCW attorney John Quinn asked.
”Phil Barach,” Mr. Gundlach responded.
”Who's the A team?” Mr. Quinn then asked.
“I am,” Mr. Gundlach responded.
Mr. Gundlach later added: “I did not think of Phil as some sort of employee. I think of Phil as an important partner. But it's true that I think that ... the strategy really depends on me. And Phil — Phil probably couldn't run (the portfolios) with the same results without me.”
Mr. Quinn then asked Mr. Gundlach about a 2006 award from Morningstar Inc., given to Mr. Gundlach for “fixed-income manager of the year.”
“It certainly drove you crazy when people inside TCW gave Mr. Barach credit, any credit, for that award, isn't that true?” Mr. Quinn asked.
“No,” Mr. Gundlach responded.
Mr. Quinn then produced an e-mail in which Mr. Gundlach asked Ms. VanEvery to make sure Mr. Barach's name was dropped from press materials from TCW announcing the award.
“I hate to nitpick, and I even less like looking like an egomaniacal nitpicker, but Morningstar did not give the 2006 FI manager of the year to JG and co-manager PB, right? ... They gave it to JG full stop. ... Our documents must say that, exactly that. Can you quietly fix this?”
Ms. VanEvery did so.
Code names also have been part of the storyline. E-mails show that during negotiations in 2009 between Mr. Gundlach and officials of Western Asset Management Co. over the possibility of Mr. Gundlach joining WAMCO or merging operations, Mr. Gundlach was called Artwork and members of his mortgage-backed securities team were called Gallery.
The code words were references to Mr. Gundlach's love of art, particularly Dutch modern artist Piet Mondrian and minimalist artist Donald Judd.