William H. Gross is returning to his investment roots at Janus Capital Group, with plans to add a version of the PIMCO Total Return Fund that made him famous.
The Janus portfolio manager said in a wide-ranging interview with Pensions & Investments, which also touched on his PIMCO past and future goals, that an institutional investor is finalizing arrangements for at least a $100 million total return strategy institutional separate account. He declined to name the investor.
Denver-based Janus, for its part, is actively advertising Mr. Gross' total return institutional strategy on its website.
Mr. Gross also said he expects to launch a Janus total return mutual fund, although arrangements have not been finalized.
“The thinking is to make it available in mutual fund form,” said Mr. Gross in a telephone interview from his Newport Beach, Calif., office. “In simple English, it's back to the roots of the Total Return Fund.”
As co-founder of Pacific Investment Management Co., Mr. Gross managed the Total Return Fund for more than 25 years and enjoyed solid investment returns for much of that time, making it the world's largest bond fund with assets of nearly $300 billion at its 2013 peak.
But Mr. Gross' management of the fund ended with his sudden departure from PIMCO in September 2014 following deteriorating investment performance and a dispute over how the firm should be run.
Mr. Gross joined Janus and within a matter of days took over as portfolio manager of the Janus Global Unconstrained Bond Fund. Mr. Gross said the fund was open when he joined Janus but it had only $9 million in assets. That made it a logical opportunity for him to start managing money right away.
Despite strong investment performance this year, the $1.6 billion Janus Unconstrained Global Bond fund remains just a fraction of the size of the PIMCO Total Return Fund under Mr. Gross' management and a smaller fund he managed, the PIMCO Unconstrained Bond Fund.
The Total Return fund had $221.6 billion in assets under management when Mr. Gross left PIMCO in September 2014 while the PIMCO Unconstrained Bond Fund had $21.6 billion at the time of his departure. Assets under management of both funds have since dropped, to $84.4 billion and $3.7 billion, respectively, as of Sept. 30, Morningstar data show.