Skip to main content
MENU
Subscribe
  • Login
  • My Account
  • Logout
  • Register For Free
  • Subscribe
  • Topics
    • Alternatives
    • Artificial Intelligence
    • CIOs
    • Consultants
    • Defined Contribution
    • ESG
    • Face to Face
    • Hedge Funds
    • Industry Voices
    • Investing
    • Money Management
    • Partner Content
    • Private Credit
    • Pension Funds
    • Private Equity
    • Real Estate
    • Regulation
    • Special Reports
    • Washington
    • White Papers
  • International
    • U.K.
    • Canada
    • Europe
    • Asia
    • Australia - New Zealand
    • Middle East
    • Latin America
    • Africa
  • Rankings & Awards
    • 1,000 Largest Retirement Plans
    • Top-Performing Managers
    • Largest Money Managers
    • DC Money Managers
    • DC Record Keepers
    • Largest Hedge Fund Managers
    • World's Largest Retirement Funds
    • Best Places to Work in Money Management
    • Excellence & Innovation Awards
    • WPS Innovation Awards
    • Influential Women in Institutional Investing 2024
    • Eddy Awards
  • Resource Guides
    • Active Thematic Global Equities
    • Retirement Income
    • Fixed Income
    • Pension Risk Transfer
    • Pooled Employer Plans (PEPs)
  • ETFs
    • Latest ETF News
    • Fund Screener
    • Education Center
    • Equities
    • Fixed Income
    • Commodities
    • Actively Managed
    • Alternatives
    • ESG Rated
  • ESG
    • Latest ESG News
    • The Institutional Investor’s Guide to ESG Investing
    • ESG Sustainability - Gaining Momentum
    • ESG Investing | Industry Brief
    • Innovation in ESG Investing
    • ESG Rated ETFs
    • Divestment Database
  • Defined Contribution
    • Latest DC News
    • The Plan Sponsor's Guide to Retirement Income
    • DC Money Manager Rankings
    • DC Record Keeper Rankings
    • Innovations in DC
    • DC Plan Design: Improving Participant Outcomes
  • Searches & Hires
    • Latest Searches & Hires News
    • Searches & Hires Database
    • RFPs
  • Research Center
    • The P&I Research Center
    • Earnings Tracker
    • Endowment Returns Tracker
    • Corporate Pension Contribution Tracker
    • Pension Fund Returns Tracker
    • Pension Risk Transfer Database
  • Careers
  • Events
    • View All Conferences
    • View All Webinars
  • Print
Breadcrumb
  1. Home
  2. MONEY MANAGEMENT
February 04, 2019 12:00 AM

Bill Gross retires after storied four-decade career in bonds

Bloomberg
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print
    Bloomberg
    Bill Gross

    Bill Gross, who reigned for decades as the Bond King at Pacific Investment Management Co., is retiring more than four years after jumping to Janus Henderson Group from the fixed-income giant he co-founded.

    "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," Mr. Gross said in a statement Monday. "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, 74, has run the Janus Henderson Global Unconstrained Bond Fund since late 2014, shortly after he suddenly left PIMCO in the midst of a management clash. His annualized returns of less than 1% at Janus failed to live up to his stellar long-term record from the PIMCO era.

    The billionaire money manager started his latest chapter with fanfare, compared by Janus Chief Executive Officer Dick Weil to Super Bowl-winning quarterback Peyton Manning, "that game-changing level of talent." Gross poured $700 million of his personal fortune into the unconstrained fund, but he failed to attract much outside money and his performance relative to peers deteriorated each year.

    The go-anywhere fund lost almost 4% in 2018, sparking a stream of investor redemptions that drove assets below $1 billion from the peak of $2.24 billion early in the year. Mr. Gross, who in September 2018 reduced his own stake in the fund, had blamed losses during the year's first half partly on a misplaced bet that rates on U.S. Treasuries and German bunds would converge, a position he eventually scaled back.

    Less 'leeway'

    "The sort of underperformance we're seeing is challenging and disappointing to him more than any of us," Mr. Weil, whose firm is now based in London, said in a Bloomberg Television interview in August.

    In the statement Monday, Mr. Weil said: "Bill 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."

    When Mr. Gross joined Janus, he knew time was limited to prove he retained his market mastery.

    "I won't have five to 10 to 15 years leeway like I had at PIMCO to do that, but certainly for the next two, three, four years," Mr. Gross told Bloomberg TV in 2015. "I'm a very competitive person and I like to post numbers that are better than the market and better than the competition."

    Mr. Gross' sudden exit from PIMCO, which he helped build into one of the world's preeminent fixed-income money managers, jolted clients and advisers. At Janus, he became essentially a solo act operating from Newport Beach, Calif., with a much smaller supporting cast. His only co-manager, Kumar Palghat, left the fund after a year.

    Total return

    At PIMCO, Mr. Gross had racked up one of the longest winning streaks of any money manager. The PIMCO Total Return Fund, which he founded in 1987, became the world's biggest mutual fund as assets swelled to almost $300 billion at its 2013 peak, generating annualized returns of 7.8% from inception through his last day.

    "No other fund manager made more money for people than Bill Gross," Morningstar Inc. said in January 2010, when it named him fixed-income manager of the decade.

    Mr. Gross, an Ohio native, was a gambler before he became an investor. He taught himself blackjack card counting from the book "Beat the Dealer" while recovering from a car accident during college. After graduating from Duke University, he turned $200 into $10,000 over four months in Las Vegas, raising the tuition for his MBA at UCLA.

    'Aspiring artist'

    He became a bond manager almost by accident, getting a job in the fixed-income department of Pacific Mutual Life Insurance Co. in Los Angeles in 1971, where he was assigned to a new program that actively traded bonds. It was there he developed his total return strategy that generated income from both bond coupons and prices.

    As Mr. Gross' reputation spread, he became such a frequent business TV guest that PIMCO installed a studio.

    "Most money managers would opt for the lean green, most politicians for power," he wrote in a 1997 book on investing. "Perhaps only the artist would choose fame at the expense of the other two. I guess that's what I am at heart — an aspiring artist who happens to be well paid for doing something."

    PIMCO thrived on Mr. Gross' record as a fixed-income whiz, a feat aided by an historic bond bull market that began in the early 1980s when interest rates began a prolonged decline. Experts from Wall Street to the Federal Reserve followed the firm for market cues.

    Obsessive drive

    Mr. Gross drove himself obsessively. A former devoted long-distance runner, he once raced from San Francisco to Carmel, Calif., and became hospitalized with kidney damage.

    PIMCO's assets swelled after the 2008 financial crisis, when the Total Return Fund and other accounts produced gains even as stocks plunged.

    But a few years later, his performance wobbled. Total Return lagged peers in 2011 and again in 2013, exacerbating friction between Mr. Gross and colleagues. In early 2014, CEO and Co-CIO Mohamed El-Erian quit.

    Mr. Gross sought to weed out managers he suspected of disloyalty, spurring executives at PIMCO's parent, German insurer Allianz SE, to intervene. Mr. Gross eventually jumped ship before he could be thrown overboard. On Sept. 26, 2014, he left a handwritten note announcing his resignation as of 6:29 a.m. Pacific time — one minute before New York markets opened.

    Investors withdrew hundreds of billions of dollars, little of which followed Mr. Gross to Janus Capital, as the firm was known before its 2017 merger with Henderson Group.

    Related Articles
    A year later, PIMCO still feels effect of Gross' exit
    Gross sues PIMCO, calls out executives for appetite for riskier, higher-fee str…
    Bill Gross bond fund sees $580 million in outflows
    Gross' unconstrained bond fund … strained
    Bill Gross' bond fund dips under $1 billion after redemptions
    Recommended for You
    Headshot of Michael Chang
    Eastspring Investments Berhad appoints head of investments
    Headshot of Ryan Gordon
    Quinbrook Infrastructure Partners names head of APAC
    Headshot of Patrick Dlamini
    South Africa's PIC chooses next CEO, tasks him with addressing private asset concerns
    Sponsored
    White Papers
    The State of Lifetime Income Report
    The Next Wave of LDI Evolution
    Retirement security to future income wins, TIAA brings you the latest financial…
    U.S. Public Funds Top Performers: Q2 2024
    Generative AI Investing: Opportunities at a Key Tech Inflection Point
    Research for Institutional Money Management: Advancing Physical Risk Modelling,…
    View More
    Sponsored Content
    Partner Content
    The Industrialization of ESG Investment
    For institutional investors, ETFs can make meeting liquidity needs easier
    Gold: the most effective commodity investment
    2021 Investment Outlook | Investing Beyond the Pandemic: A Reset for Portfolios
    Ten ways retirement plan professionals add value to plan sponsors
    Gold: an efficient hedge
    View More
    E-MAIL NEWSLETTERS

    Sign up and get the best of News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Today
    October 23, 2023 page one

    Get access to the news, research and analysis of events affecting the retirement and institutional money management businesses from a worldwide network of reporters and editors.

    Subscribe
    Connect With Us
    • RSS
    • Twitter
    • Facebook
    • LinkedIn

    Our Mission

    To consistently deliver news, research and analysis to the executives who manage the flow of funds in the institutional investment market.

    About Us

    Main Office
    685 Third Avenue
    Tenth Floor
    New York, NY 10017-4036

    Chicago Office
    130 E. Randolph St.
    Suite 3200
    Chicago, IL 60601

    Contact Us

    Careers at Crain

    About Pensions & Investments

     

    Advertising
    • Media Kit
    • P&I Custom Content
    • P&I Careers | Post a Job
    • Reprints & Permissions
    Resources
    • Subscribe
    • Newsletters
    • FAQ
    • P&I Research Center
    • Site map
    • Staff Directory
    Legal
    • Privacy Policy
    • Terms and Conditions
    • Privacy Request
    Pensions & Investments
    Copyright © 1996-2025. Crain Communications, Inc. All Rights Reserved.
    • Topics
      • Alternatives
      • Artificial Intelligence
      • CIOs
      • Consultants
      • Defined Contribution
      • ESG
      • Face to Face
      • Hedge Funds
      • Industry Voices
      • Investing
      • Money Management
      • Partner Content
      • Private Credit
      • Pension Funds
      • Private Equity
      • Real Estate
      • Regulation
      • Special Reports
      • Washington
      • White Papers
    • International
      • U.K.
      • Canada
      • Europe
      • Asia
      • Australia - New Zealand
      • Middle East
      • Latin America
      • Africa
    • Rankings & Awards
      • 1,000 Largest Retirement Plans
      • Top-Performing Managers
      • Largest Money Managers
      • DC Money Managers
      • DC Record Keepers
      • Largest Hedge Fund Managers
      • World's Largest Retirement Funds
      • Best Places to Work in Money Management
      • Excellence & Innovation Awards
      • WPS Innovation Awards
      • Influential Women in Institutional Investing 2024
      • Eddy Awards
    • Resource Guides
      • Active Thematic Global Equities
      • Retirement Income
      • Fixed Income
      • Pension Risk Transfer
      • Pooled Employer Plans (PEPs)
    • ETFs
      • Latest ETF News
      • Fund Screener
      • Education Center
      • Equities
      • Fixed Income
      • Commodities
      • Actively Managed
      • Alternatives
      • ESG Rated
    • ESG
      • Latest ESG News
      • The Institutional Investor’s Guide to ESG Investing
      • ESG Sustainability - Gaining Momentum
      • ESG Investing | Industry Brief
      • Innovation in ESG Investing
      • ESG Rated ETFs
      • Divestment Database
    • Defined Contribution
      • Latest DC News
      • The Plan Sponsor's Guide to Retirement Income
      • DC Money Manager Rankings
      • DC Record Keeper Rankings
      • Innovations in DC
      • DC Plan Design: Improving Participant Outcomes
    • Searches & Hires
      • Latest Searches & Hires News
      • Searches & Hires Database
      • RFPs
    • Research Center
      • The P&I Research Center
      • Earnings Tracker
      • Endowment Returns Tracker
      • Corporate Pension Contribution Tracker
      • Pension Fund Returns Tracker
      • Pension Risk Transfer Database
    • Careers
    • Events
      • View All Conferences
      • View All Webinars
    • Print