Billionaire 'Bond King' Bill Gross Jumps Ship Before Being Canned
William "Bill" Gross, known as the Bond King for his long standing acumen, suddenly announced his resignation from PIMCO, the major investment group he co-founded, according to a company press release. Gross has moved to rival Janus Capital, as a separate press release indicated.
But the sudden departure comes amid a number of uncomfortable circumstances and came right before PIMCO was set to remove him, according to the New York Times. Running up to his department were reports of erratic behavior, questions about his leadership, the declining performance of the funds he directed, and a Securities and Exchange Commission investigation into a fund he managed.
He was so associated with PIMCO that as of this morning his picture was still at the top center of the company's website. The 70-year-old made a $200 million annual salary, according to Business Insider. Gross is personally worth $2.3 billion, according to a Forbes estimate, was instrumental in PIMCO managing $2 trillion in assets. His work at the company reportedly made him the most powerful figure in the bond industry, as he managed, at $236 billion, the Total Return Fund, the largest bond fund in the world.
But over the last year, things began to deteriorate. Total Return Fund performance has lagged that of other bond funds. PIMCO CEO Mohamed El-Erian, who was supposed to take over from Gross, left the company in January. The rumored reason was "controversy over Gross's reportedly high handed management style," according to Forbes. That "sometimes included frequent outbursts," as the Times reported. The Wall Street Journal reports that PIMCO had repeatedly warned Gross about his behavior.
Then there was his personal behavior, which concerned many, including "showing up at a mutual fund industry forum to give an address wearing sunglasses and penning a monthly investor letter that was essentially an ode to his dead cat," according to the Times.
Wrapping up the package of bad news has been the SEC inquiry into whether someone artificially inflated the performance numbers of a $3.6 billion fund that Gross directly managed.
MarketWatch called that last 12 months Gross's "terrible, horrible, no good, very bad year."
According to Reuters, Gross knew he was being ousted and had threatened to quit on multiple occasions.