Marc’s Notes:
The Pimco funds, some of the biggest bond funds in the country, took massive hits to their stock prices on the news its chief honcho and founder Bill Gross resigned to go to Denver based Janus Capital Group.
Pimco funds manage or should I say “managed” over 2 trillion in assets before the announcement of Bill Gross’s exit. Almost immediately after the news hit the wires, over 70 billion dollars flew out of the family of funds in a stunning vote of confidence in Bill Gross’s ability to manage money and was a slap in the face to the parent company he left the Newport Beach based PIMCO.
Co-founding Pacific investment Management company later to become PIMCO, the performance of PIMCO funds was exceeded by few and most of the reason for their ongoing success was Bill Gross.
Call him the Steve Jobs of money management, Bill Gross was a leader in bond and asset management and consistently posted excellent returns thru the thick and thin of the Wall Street roller coaster.
In recent years however there were losses at their flagship fund, The Pimco Total Return Fund and couple that with reports of outlandish behavior by Gross was rumored to have led to internal squabbles which may have pre-empted Fridays move.
Some news reports said PIMCO was going to ask Gross to leave anyway and Gross made the decision to leave on his own timing.
Whatever happened, PIMCO suffered devastating losses to all of its funds and its companies stock while Janus Capital Stock, the new digs where Gross will work rose 43 %.
Only time will tell if the massive investor exodus from Pimco family of funds will continue. Pimco funds are held almost everywhere and are in the largest of pension and retirement plans. Indeed many a portfolio I have seen in the past contained a Pimco fund or two.
No doubt Janus Capital will reap more than its stock increase when some of that money fleeing Pimco funds follows Gross to his new haunts and no doubt Janus will reward Gross handsomely to say the least. Not that Gross needs the money mind you, he has an estimated net worth of over 2 billion and growing.
