Legendary investor Bill Gross, the onetime king of the bond market, announced plans on Monday to retire after more than four decades in finance.
Gross, 74, will step aside on March 1 to focus on managing his personal assets and charitable foundation, according to Janus Henderson (JHG), the firm he joined in 2014 after a messy divorce with PIMCO.
Long a superstar in the investing world, Gross’ investments have fallen on hard times in recent years. The funds he manages struggled and clients yanked their money.
“I’ve had a wonderful ride for over 40 years in my career,” Gross said in a statement. “I’m off – leaving this port for another destination with high hopes, sunny skies and smooth seas!”
Gross co-founded PIMCO in 1971, turning the Newport Beach, California, firm into a powerhouse in the bond industry. Gross was named fixed income manager of the decade (2000 to 2009) by Morningstar. He enjoyed so much success that he became known as the “bond king,” a title that has since been bestowed upon DoubleLine Capital’s Jeff Gundlach.
“Bill spearheaded a series of transformational market innovations and frameworks that many investors still implement today,” Mohamed El-Erian, a former top PIMCO exec who worked with Gross, told CNN Business’ Paul R. La Monica on Monday.
Gross reportedly clashed with El-Erian at PIMCO, which by 2014 was gripped by turmoil. During a speech that year, Gross famously donned a pair of sunglasses to downplay media reports about the state of affairs at PIMCO.
“We’re a happy kingdom at Newport Beach,” Gross said at the Morningstar Investment Conference in Chicago.
Just three months later, Gross left PIMCO on bad terms. At the time, PIMCO was the world’s largest bond firm, with nearly $2 trillion in assets.
Gross filed a lawsuit against PIMCO in 2015 that alleged a “cabal” of executives had wrongfully removed him in a conspiracy driven by a “lust for power.” Gross and PIMCO reached an $81 million settlement two years later.
“He built a firm that stands today as among the very best, even in his absence,” Morningstar research analysts wrote in a report on Monday. “That said, his jarring departure from PIMCO and the nasty spat with his former firm were blemishes on his record.”
After leaving PIMCO, Gross joined Janus Capital, now known as Janus Henderson. Gross’s global unconstrained fund (JUCAX) initially enjoyed a surge of inflows. But the fund has stumbled in recent years and suffered from hefty client withdrawals.
The unconstrained fund ranked 88th in its category in 2018 and 76th the prior year, according to Morningstar.
Janus said that the fund has underperformed its three-month Libor benchmark since Gross joined in late 2014.
“The four-year performance has been unsatisfactory no doubt,” Gross told Bloomberg News on Monday. He noted that his fund’s performance was still “positive.”
According to Janus, a separate total return fund managed by Gross outperformed its benchmark through the end of 2018.
“Bill is one of the greatest investors of all time and it has been my honor to work alongside him,” said Dick Weil, CEO of Janus Henderson.
Janus said that effective February 15 it will rename Gross’s global unconstrained bond fund the “Absolute Return Income Opportunities.”
Gross isn’t done managing money though.
He will continue to oversee $390 million held by the William, Jeff and Jennifer Gross Family Foundation. In addition to managing his personal fortune, Gross said he plans to work with his son and daughter to find worthy causes to support that are “creating better lives locally and around the world.”