After a tumultuous year, bond king Bill Gross is ending his 43-year career at PIMCO to join Janus Capital (JNS), effective Sept. 29. He'll run the firm’s Global Unconstrained Bond Fund. Janus’ stock was up 40 percent in pre-market trading, with pre-market volume at 14 million shares.
“Today, with a mixture of excitement and sadness, I am announcing that I have decided to join Janus Capital Group and end my association with PIMCO,” Gross said, in a statement. “It was not without great thought and deliberation over quite some time that I decided to begin this next chapter.
“But now, after having spent considerable time serving in senior management, it is a time for me to reduce executive and people management responsibilities at a larger firm and focus on the pure aspects of portfolio management at a smaller one.”
Janus is run by former PIMCO managing director and chief operating officer Dick Weil. At Janus, Gross looks forward to a simpler yet still intense career, helping individuals achieve above market returns in a risky environment, he said.
PIMCO said a successor would be announced shortly.
“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,” said Douglas Hodge, PIMCO CEO.
In addition to managing the Unconstrained Bond Fund, Gross will also be responsible for expanding Janus' global asset allocation business, alongside Myron Scholes and Ashwin Alankar.
Bill Gross and PIMCO have struggled with negative news headlines this year, starting when Mohamed El-Erian stepped down as the firm’s CEO and co-chief investment officer in March. The announcement triggered a wave of stories about El-Erian’s departure and his relationship with Gross.
PIMCO’s Total Return Bond Fund was the world’s largest mutual fund for many years, amassing $18 billion in new assets in 2012, according to Morningstar. But in May 2013, the fund started bleeding assets following poor performance. August marked the 16th straight month of withdrawals, with $3.9 billion in outflows during the month.
And just this week, reports surfaced of an investigation by the Securities and Exchange Commission into the inflated returns of PIMCO’s Total Return ETF, run by Gross.
In June, Gross showed up to Morningstar's annual advisor conference wearing sunglasses and comparing himself to Justin Bieber.
Gross co-founded Newport Beach, Calif.-based PIMCO in 1971.
“I sincerely wish all of my friends and associates at PIMCO much future success,” Gross said. “It has been an honor to have worked at PIMCO these many years."