Clients continue to leave Pimco and, in particular, Mr. Gross’s fund. His Total Return fund, the world’s largest bond fund, saw $4.5 billion of net investor outflows in June—its 14th consecutive month of defections—despite outpacing two-thirds of it rivals in the second quarter, according to fund-research firm Morningstar Inc. Over that period, investors pulled $64 billion from the now-$225 billion fund, an amount that dwarfs the total size of most mutual funds. The withdrawals came as investors, industrywide, added money to bond funds. Pimco has suffered net outflows across all its mutual funds for the past 13 months. [...] “My attitude is, ‘We’ll show ya,’ ” Mr. Gross said during the interview at Pimco’s headquarters, while wearing an unknotted blue tie he says was a present from Mr. El-Erian. “I’m not leaving until we show everybody that this new structure is better than the old structure.” “Don’t count me out,” he added. [WSJ, earlier]
For the first 43 years of his career, Pimco founder Bill Gross thought it was acceptable to issue demerits to people who looked him in the eye or spoke to him. So in February, when he was more or less forced to figure out how, at the age of 70, to act like a pleasant person, or face even more high level departures by people who suffer from debilitating conditions that cause them to make eye contact, it was obvious he had a rough road ahead of him.
Not wanting to read more articles about how he made someone write a $10,000 check for sitting, or slashed another’s bonus for failing to include a ‘p.37′ on a powerpoint presentation, Gross worked hard at the task at hand, and meaningful progress was made. Most notably, investment committee meetings “now take place in a room with a round table, rather than a rectangular one as in the past,” which according to Gross, has made people more comfortable and willing to speak (period, and also to express a difference of opinion with the boss).
But Rome wasn’t built in a day, and if you thought there wouldn’t be setbacks on the road from being a guy who “humiliate[s] people for stumbles” and instills such fear in them that they “recall nights [they were] so scared of being fired for mistakes [they] could not sleep” to a guy people want to be around, you thought wrong. Read more »
Bill Gross was at the Morningstar annual conference in Chicago today, saying things. Here are some of the things he said: Read more »
Yesterday, we learned that after months of turmoil following the departure of Mohammed El-Erian, Bill Gross had finally found a way to bring some much needed stability to his life and to his firm: Paul McCulley. Returning to the fold following his 2010 departure, the former Pimco executive has been named “chief economist” and will report to Gross.
From the get-go it, it was clear that in coming out of retirement, cutting his hair, and buttoning his top button, McCulley was making a huge sacrifice for his buddy Bill. But a new report suggests that the McCulley hire goes deeper than Gross simply needing an old friend by his side. He also needed a small furry creature to recommend stocks, and as luck would have it, McCulley could deliver both. Read more »
In Bill Gross’s darkest hour, former Pimco executive Paul McCulley decided not only to come out of retirement and serve as the “unifying force” at the firm, but to chop off his greatest asset. Read more »
Last month, Pimco deputy chief investment officer Scott Mather announced that the “new normal,” a phrase created by Pimco founder Bill Gross and former CEO Mohamed El-Erian, was no longer. “Our view is that what you’ll see in next the few years is we’re going to head back to a new destination,” Maher said in an interview with Bloomberg Surveillance. It was assumed that Maher made the proclamation with the full backing of Gross, and, what’s more, that it came about as a result of Gross’s feelings for his collaborator El-Erian, who quit in February and who Gross, after a series of outbursts regarding the departure, was ready to declare dead to him, along with the phrase. Apparently, though, Maher spoke too soon. Read more »
Pacific Investment Management Co. and co-founder Bill Gross got a vote of confidence from owner Allianz as the fund company struggles with subpar investment performance and investor defections. “Pimco is still one of the most successful firms in the market,” Jay Ralph, the Allianz management board member who oversees Pimco, said in an interview on Tuesday…Total Return has seen $55.3 billion in net redemptions since May 2013, more than most U.S. mutual funds hold in assets. Mr. Gross’s performance also has faltered: the fund returned 0.74% in April, while its benchmark, the Barclays U.S. Aggregate Bond Index, returned 0.84%. [WSJ]