Bill Gross, who co-founded Pacific Investment Management Co. more than four decades ago and rose to become manager of the world’s biggest bond mutual fund, is leaving amid a dispute with management over how to move the firm forward and end record redemptions.
Gross, 70 and until Friday manager of the $222 billion Pimco Total Return fund, will join Janus Capital Group Inc. to oversee a new bond fund, according to a statement Friday from Denver-based Janus. As of Thursday night, Pimco was considering naming Daniel Ivascyn to succeed Gross as CIO, according to a person familiar with the matter who asked not to be identified.
“I look forward to returning my full focus to the fixed income markets and investing, giving up many of the complexities that go with managing a large, complicated organization,” Gross said in the statement. “I chose Janus as my next home because of my long standing relationship with and respect for CEO Dick Weil and my desire to get back to spending the bulk of my day managing client assets.”
The departure of Gross, a legend in bond investing, caps a tumultuous year for Pimco and marks the end of an era for the firm he helped create in 1971. Pimco in January announced the biggest management reorganization in its history after the abrupt resignation of former Chief Executive Officer Mohamed El- Erian, who had clashed with Gross over management of the firm. Gross’s main fund has shrunk from a peak of $293 billion last year as performance trailed rivals and investors turned away from traditional fixed-income strategies in anticipation of rising interest rates.
“While we are grateful for everything Bill contributed to building our firm and delivering value to Pimco’s clients, over the course of this year it became increasingly clear that the firm’s leadership and Bill have fundamental differences about how to take Pimco forward,” Douglas Hodge, Pimco’s CEO, said in a separate statement.
Gross knows Janus’s Weil from Pimco, where Weil worked from 1996 to 2010. He served as general counsel at Pimco and later became a manager director and chief operating officer. He was hired to run Janus in January 2010.
Attempts to reach Gross through his assistant were unsuccessful, and he didn’t return e-mails seeking comment.