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Money Management

Bill Gross leaves long legacy as he departs professional money management

Bill Gross

William H. "Bill" Gross' retirement from Janus Henderson Investors isn't expected to have a marked impact on the firm, but the bond king's legacy in raising the profile of active management in fixed income can't be disputed, colleagues and industry observers said.

Mr. Gross, 74, is leaving his job as portfolio manager of Janus Henderson Investors' Global Unconstrained Bond Fund and related strategies on March 1 to focus on managing his personal fortune and family foundation, said Janus Henderson in a news release Monday.

"Bill Gross was instrumental in making actively investing in bonds cool and for showing the world that you could do more with them than just ladder a portfolio. He also raised the bar on secular outlooks being a key component of investing," said Timothy Barron, senior vice president and CIO of investment consultant, Segal Marco Advisors, in an email.

Mr. Gross joined Janus Henderson as portfolio manager of the global unconstrained bond and total return strategies in September 2014. Before that, he was managing director and its chief investment officer of Pacific Investment Management Co., which he co-founded in 1971.

"For billions of dollars of individual and institutional assets, investing in fixed income with PIMCO was a no brainer during his reign. The casual, often controversial, and philosophical nature of his monthly commentary, whether looking at the man in the mirror or lamenting his deceased cat, were eagerly awaited and consumed," Mr. Barron added.

Mr. Gross' departure comes after assets under management in the Global Unconstrained Bond Fund, a mutual fund, declined to $950.4 million as of Dec. 31, down 56.8% from $2.201 billion as of the same date the prior year and down 30.9% from Dec. 31, 2014, the year Mr. Gross joined the firm.

The amount Mr. Gross and his team managed in institutional separate and commingled funds using the same or related strategies as of Dec. 31 was not available. A Janus Henderson spokeswoman declined to comment beyond the news release.

Mr. Gross' departure from Janus Henderson is unlikely to have far-reaching repercussions for the firm, sources said.

"It really can't be argued that Bill's departure will greatly impact Janus Henderson because the asset level he's managing isn't material to the company," said Michael Falk, partner at money management consultant Focus Consulting Group, Long Grove, Ill. Janus Henderson managed about $378 billion as of Sept. 30.

Janus Henderson named Nick Maroutsos, co-head of global bonds and portfolio manager at Janus Henderson, to replace Mr. Gross on Feb. 15. He will work with the same global macro fixed-income team that has supported Mr. Gross since he joined Janus, a company news release said.

Janus Henderson's global unconstrained bond funds domiciled in the U.S. and Ireland will be renamed Absolute Return Income Opportunities effective Feb.15. There will be no change to the investment objective or guidelines, the firm said.

Praise for Mr. Gross' long money management career from his boss at Janus Henderson is high.

"I have known Bill for the past 23 years. He is one of the greatest investors of all time and it has been my honor to work alongside him. I want to personally thank him for his contributions to the firm," Janus Henderson CEO Dick Weil said in the release.

In a statement, Mr. Gross said: “I've had a wonderful ride for over 40 years in my career — trying at all times to put client interests first while inventing and reinventing active bond management along the way. So many friends and associates at my two firms to thank — nothing is possible without a team working together with a common interest.”

Mr. Gross told Pensions & Investments: “My bond career now will be the seed for a continuing program helping the disadvantaged take back what they have lost in recent years to the more fortunate. I expect to fund and speak out on a host of issues such as global warming, education and higher taxes for the 1%.”

Mr. Gross will continue his charitable efforts with his son and daughter through the $390 million William, Jeff and Jennifer Gross Family Foundation, Laguna Beach, Calif.

Mr. Gross' philanthropic donations have totaled $800 million over the past 20 years, the JHI release said.