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Bill Gross Joins Janus Capital

hank
edited September 2014 in Fund Discussions
Wow. Wondering how all this will affect the SEC probe? PIMCO's still under investigation. But both men at the top have fled the ship.

Allianz, PIMCO's European owner, has been rumored for some months to be unhappy.

Here's the blurb from MarketWatch: "...William H. Gross, world-renowned fixed income investor, will be joining Janus Capital Group. He will manage a recently launched Janus Global Unconstrained Bond." See David's clarification below as to which fund Gross will manage.


http://www.marketwatch.com/story/william-h-gross-joins-janus-capital-2014-09-26?reflink=MW_news_stmp
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Comments

  • scott
    edited September 2014
    First thing I thought when I read this was, "Is it April 1st?" Realized, no, no it isn't.

    Look at JNS pre-market (+38% as of this)...Allianz is surprisingly not down as much as I'd expect. Pimco is in real trouble and as much as I'd thought about getting out of Pimco funds before, I'll definitely get out of the rest as I can (in terms of holding period, etc.)
  • TedTed
    edited September 2014
    @hank: I'm shocked ! It looks like the king is dead, long live the king. JNS up 39% in pre-market.
    Regards,
    Ted
    http://www.marketwatch.com/story/is-the-bond-kings-reign-really-over-2014-09-25/print
  • BWG
    edited September 2014
    Buying opportunity in PDI and other PImco CEFs today? More broadly, since this departure may imply increased portfolio tirnover at some very large Pimco funds, we may see some temporarily/irrationally lower prices in some bond categories -- what is the best way to play this?

    Some other thoughts:
    1) Congrats to JNS (Janus) shareholders. Shares up sharply.
    2) Some of the institutional money may follow Gross to Janus. Some of it may also go to other bond fund managers. Doubleline should see an increase in AUM -- good for Oaktree shareholders.
  • JohnChisum
    edited September 2014
    According to Bloomberg, Gross will manage their Global Unconstrained Bond Fund. Is this a new offering?

    I'm not sure this is a positive for Janus. Too many questions at Pimco and Bill Gross cannot run away from them or the investigators.

    I could add something about Janus here but I will hold back for now.
  • hank
    edited September 2014
    JUCAX the Class A version of the Janus Unconstrained Bond Fund (Inception: May 2014) carries a 4.75% front load. Can't imagine a typical small investor paying such a load today for any bond fund. There are however several other share classes (likely for institutions, large investors, and retirement plans) that do not carry a load.
  • JohnChisum
    @hank, the fund I see has Global in the name so wonder if this is a new fund?

    Just checked Janus.com. Bill Gross is plastered all over that site.
  • scott
    BWG said:


    2) Some of the institutional money may follow Gross to Janus. Some of it may also go to other bond fund managers. Doubleline should see an increase in AUM -- good for Oaktree shareholders.

    Yay. lol.

    I do think that you will likely see money flee from Pimco. I do think that there are good managers at Pimco, but I think what concerns me is that (and obviously, I don't know what's really going at Pimco) you have this situation that comes as a surprise to everyone and it makes me question what kind of planning if any was being done at Pimco. You've had co-managers leaving the equity funds. You have Gross, who was listed manager on a ton of funds.

    I mean, look at the Arnott All Asset/All Authority funds. What % of those portfolios are Gross-managed funds?

    Again, I'm not usually so company-sensitive, but there clearly seems to be turmoil at Pimco and more than I'd thought.
  • JohnChisum
    @scott, funny how we talked about Pimco once being a class organization. That was not that long ago. Bill Gross was Pimco and vis a versa. I think this has huge ramifications for Pimco.

    The big question might be who caused the conflict? Gross or Allianz?
  • scott
    JohnChisum said:

    @scott, funny how we talked about Pimco once being a class organization. That was not that long ago. Bill Gross was Pimco and vis a versa. I think this has huge ramifications for Pimco.

    The big question might be who caused the conflict? Gross or Allianz?

    Gross, from the sound of it. El-Erian is now at Allianz, but he said the other day he has no dealings with Pimco.

    Apparently, there was a plan in place and someone new will be named within hours, according to a press release. Still, those are huge shoes to fill and the whole situation at Pimco seems messier than previously thought. I continue to have the view that I will sell remaining Pimco funds as I'm able to do so.


  • CharlesCharles
    Wow is right. Suspect TM will leave soon too, again.
  • msf
    Gross leaves with PTTDX (retail version of his flagship fund) barely in the top half (48th percentile) for the past five years, and lagging substantially this year. Desertions have raised doubts about his management abilities (in the PR, he says he's getting away from some of these responsibilities). It does raise questions about his ability to build another organization and keep people - which is what Janus wants him to do.

    Looks like he's selling an asset (himself) before the value declines too much.

    With respect to Janus A shares - they have these on most of their funds. Just like PIMCO. If one is going to focus on share classes, Janus is offering it usual class T shares (JUCTX). What I find interesting is that they also offer D shares (JUCDX). Janus sells D shares only to grandfathered investors who already invest directly with Janus (i.e. not through a supermarket). That they continue to create this lower cost class for new funds shows they have not abandoned no load, just direct sales.
  • scott
    Gross is acting like this is a move to let him get back to focusing on markets and not having to also run a large organization. Now it becomes a matter of proving that that's the case with a return to performance.

    The concerning part is, if Pimco's Total Return fund has to start dumping because of fund holders leaving, how well do markets handle the world's largest bond fund dumping?
  • catch22catch22
    edited September 2014
    Perhaps this is a good thing in the long run.

    Is anyone able to detail how much Bill Gross was really involved in managing funds?

    Dan Ivascyn and Mihir Worah, among other managers, may be pleased about this change.

    I recall a business office years ago where the staff expressed (to higher management) that either the manager (a dink of a person) leave or the staff would leave.

    There may be many smiles at the Pimco offices today.

    We will continue to monitor PIMIX for any peculiar value changes.

    Lastly. The potentially most damaging aspect is what words and thoughts come from the mouths of those (the Wall St. analyses) who "think" they know what is taking place.

    Edit: PDI is down 1.6% at 10:30; although bonds are generally being thumped at this time.
  • hank
    edited September 2014
    @JohnC: You are correct. Gross will manage The "newly launched" Janus Unconstrained "Global" Bond Fund. Here's one ticker. Don't know if there are other share classes. JHBTX

    All these offerings get confusing. I'm afraid fund companies play us for "suckers" in so many different ways. Like a coffee shop offering up 101 different flavors - except with more serious repercussions.

    Thanks for catching my goof.
  • JohnChisum
    "There may be many smiles at the Pimco offices today."

    Yep. Nobody wants to work in the middle of a live soap opera. Now I wonder how many people are going to welcome Bill Gross at Janus with clenched smiles?
  • David_Snowball
    Just to confirm: the new Gross fund is Unconstrained Bond, not "Global Unconstrained Bond." The Unconstrained Bond fund prospectus contains only one limit on the income-producing securities in which it might invest: no more than 50% of the portfolio may be invested in emerging markets. It is, otherwise, unconstrained and lists loans, international bonds, preferred stock, dividend paying common stock, money markets, junk bonds, derivatives and zero-coupons among its options.

    Gross will lead a new Global Macro division of Janus headquartered in Newport Beach CA, just over a thousand miles distant from the Mile High investment headquarters.

    More soon,

    David
  • BrianW
    I'm sure the Janus employees are thrilled.
  • msf
    JohnChisum said:

    "There may be many smiles at the Pimco offices today."

    Yep. Nobody wants to work in the middle of a live soap opera. Now I wonder how many people are going to welcome Bill Gross at Janus with clenched smiles?

    Isn't that why Janus gave Gross his own playpen, separate from their current fixed income organization?

    It's not geography - Perkins (based in Chicago) plays so well with Janus (Denver) that Janus' fixed income CIO, R. Gibbon Smith, co-manages a Perkins-branded fund (JPVTX) with Perkins. (The PR says that Gross will steer clear of Smith.)


  • hank
    edited September 2014
    David has now clarified which fund Gross will manage.
    ---

    LOL - Gross is a master of stagecraft and managed his own image very well until El-Erian tossed the grenade with the WSJ interview. That story, along with El-Erian's abrupt resignation, set things in motion. ... In the end, it speaks to the dangers of touting "star" managers and the value of the more boring team management approach.

    Gross is brilliant - but I always thought that his public pronouncements about interest rates, Fed policies, etc. were intended more to mislead markets about his true intentions than to enlighten. (Get investors leaning in one direction and than make a contrary bet.)

    Suspect these methods will continue at Janus.

  • scott
    Discussion on CNBC that Gross talked to Doubleline before Janus.
  • MarkMark
    Gross & Gundlach? Two days max before one of them would be arrested for homicide.
  • David_Snowball
    Yuh, the CEO at Janus is the former COO at PIMCO. Reportedly he and Gross got along quite well. Not to say that it ain't what you know, it's who you know, but ...
  • dryflower
    Instead of starting a new thread, I'll just note here that the biggest mutual fund beneficiary of this (speaking of TODAY only) is Ariel Fund ARGFX. My calculator says it will pick up about 1.4% today on Janus alone. Should gain 2.5% or more on the day which will take it all the way from well below average to downright subpar for the year! Yay!
  • JohnChisum
    edited September 2014
    @msf, I did see that part about Gross staying in Newport Beach late last night. Smart move on both sides. I would prefer NB over Denver weather wise.

    During the day the fund added global to its name. I checked because I was trying to get the previous managers name. He is gone now. Gross has center stage. Hopefully that guy didn't get run over by the Bill Gross train.

    So it is now the Global Unconstrained Bond.


    https://www.janus.com/advisor/funds/janus-unconstrained-bond-fund
  • JohnChisum
    Another tidbit I just saw on Bloomberg.

    Bill Gross net worth. $2 billion
    Janus net worth. $2,9 billion.
  • Old_Skeet
    Here is a quote form M* on Bill Gross leaving Pimco ...

    "We are placing all rated PIMCO funds under review--including the flagship PIMCO Total Return PTTRX--following chief investment officer Bill Gross’ immediate departure for Janus."

    Seems PASAX, that I own, is now under review ... Should I ... Buy more, Sell down, or hold?

    Wonder what Rob Arnott will do?

    Perhaps El-Erian will return to Pimco and will be assigned the task to be the clean up man after all.

    And ... so it goes.
  • JohnChisum
    Bill Gross has $240 million of his own money in Pimco funds.
  • rjb112
    JohnChisum said:

    Bill Gross has $240 million of his own money in Pimco funds.

    Interesting. Wonder where that will go to.
  • JohnChisum
    Good question. I'm guessing it leaves Pimco. Would he average into JUCTX?
  • rjb112
    He seems to like closed end bond funds a lot, especially when trading at a discount to NAV. Probably Janus doesn't have that, nor the variety of bond fund choices Bill Gross is used to. Right now JUCTX has less than 13 million in assets! I always like when a manager goes big into his own fund.

    Did you hear the high words of praise for Bill Gross coming from Jack Bogle? Pretty amazing coming from Bogle.

    http://www.mutualfundobserver.com/discuss/discussion/15862/vanguard-s-bogle-bill-gross-is-real-deal-video-presentation-how-gross-landed-at-janus#latest
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