Marc Seidner, who left Pimco earlier this year just as the fixed income powerhouse was about to be roiled by internal strife, is beating his old boss Bill Gross at a game Gross used to dominate: calling the bond market. Seidner sensed that last year’s Treasury market upheaval triggered by speculation about when the Federal Reserve would start reducing its bond-buying stimulus – the so-called “taper tantrum” – had left pockets of value in some longer-dated bonds. At Pimco, to make a big bet Seidner had to seek the approval of Gross, known in financial markets as “the Bond King.” But now as head of fixed income at the Boston-based money management firm run by contrarian investor Jeremy Grantham, Seidner was able to make a counter-intuitive call that bond yields would fall, not rise further as many had predicted. The upshot? Seidner’s bet was on the money. His core U.S. bond fund is outpacing 98 percent of its peers and easily beating Gross’s Pimco Total Return Fund, the world’s biggest bond portfolio, as the yield on the 10-year Treasury note has fallen roughly 60 basis points this year.
Exclusive – Life after Pimco: how bond manager Seidner beat his old boss Gross [Reuters / Jennifer Ablan]