Finance

One-time bond king Bill Gross to retire from Janus Henderson

Key Points
  • Bill Gross, the one-time bond king at Pimco and later Janus Henderson, announces his retirement.
  • Gross, 74, had once helped run the largest bond fund in the world but had been underperforming for several years running.
  • "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," Gross says.
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'Bond king' Bill Gross retires from investment firm Janus Henderson

Bill Gross, the one-time bond king who built investing giant Pimco from the ground up 48 years ago then went on to run his own fund at Janus Henderson, announced his retirement Monday.

The retirement, effective March 1, marks the end of an era, closing a career for a fixed income expert who once had the ear of policymakers in the highest places. After leaving Pimco, Gross was never able to regain the standing he once held, and the fund he ran for Janus Henderson had badly underperformed for most of the nearly five years he had been there.

"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," the 74-year-old Gross said in a statement.

While at Pimco, Gross helped run the world's largest mutual fund, the Pimco Total Return Fund, which once boasted nearly $300 billion in assets. The fund began to hemorrhage investor money amid a battle at the firm's top between Gross and his co-CEO Mohamed El-Erian. Most recently, it was down to $65.6 billion in assets but has been outperforming its benchmark for the past three years.

Despite some well-chronicled acrimony between the two, El-Erian was complimentary of Gross on his retirement.

"Bill leaves behind him a long history of fixed income innovation, as well as investment approaches and frameworks that many investors still use today," El-Erian said in an emailed statement.

As for Gross' fund post-Pimco, the Janus Henderson Global Unconstrained Fund, its assets have contracted to $950.4 million — less than the $1 billion or so Gross had invested to start it. Over the past year, the fund is down 4.9 percent, near the bottom of its class, according to Morningstar.

In his farewell statement, Gross thanked "all of my past clients for their trust and support. I learned early on that without a client, there can be no franchise. I'm off — leaving this port for another destination with high hopes, sunny skies and smooth seas!"

A voice in the market

Despite his travails over the past several years, Gross still had a voice. His monthly investor letters, filled not only with his market views but also esoteric personal anecdotes and philosophy, were closely watched and sometimes even moved markets.

A messy divorce with his wife of 31 years, Sue, also brought some unsavory publicity.

As for the future, Gross said he is going to focus on the William, Jeff and Jennifer Gross Family Foundation, a $390 million charity that donated more than $21.4 million to various causes in 2018, the Janus Henderson release announcing Gross' departure said.

"I look forward to continuing to work with my son Jeff and daughter Jennifer in identifying and supporting worthy and important causes that are creating better lives locally and around the world," Gross said.

His departure from Janus Henderson was a good deal more civil than what happened at Pimco.

He sued the firm for breach of good faith in 2015 amid allegations in news stories that he ran the Newport Beach, California, firm in an autocratic manner that helped push El-Erian out the door. El-Erian currently works as chief economic advisor at Allianz and has been careful to avoid public comment about his split with Gross.

Gross and Pimco eventually agreed to an $81 million settlement that, in addition to cash, included a Founder's Room named after him and a "Bill Gross Award."

"Bill Gross was a pioneer of active bond management who had an enormous influence on PIMCO's investment process, client returns and the careers of the firm's talented portfolio management team. We wish him well in retirement," Pimco said in a statement.