When markets closed yesterday, the stock value of mutual fund manager Janus Capital Group (JNS) was $2.1 billion. Bill Gross, the famed bond investor who co-founded Pacific Investment Management Co. in 1971, had a personal net worth of $2 billion, according to Bloomberg Billionaires.
That’s one way to put into perspective the startling news that Gross is leaving Pimco to run a bond fund for Janus. Here’s another: When Gross went to bed last night, he was the chief investment officer at Pimco, responsible for $1.97 trillion of investors’ money. Today he’s a fund manager at a firm that had $178 billion under management as of June 30.
Here’s another still: At Pimco, Gross was in charge of the firm’s Total Return fund, with $222 billion at his fingertips. At Janus, he’ll be running a much smaller pool of money, at least to start. The firm’s Global Unconstrained Bond Fund had $12.9 million under management as of last month.
In a statement, Gross says he’s looking forward to spending more time managing money and less time running a large corporation. Nobody ever quit the job of running the New York Yankees to play second base for the Newark Bears.
Gross’s move comes at the end of what has been a very bad year. Mohamed El-Erian, Pimco’s CEO and co-chief investment officer, left the firm in January amid reports Gross was to blame. Investors pulled money from the firm’s main fund, which shrank to $222 billion from a peak of $293 billion last year. It’s been reported today that Pimco, which is owned by the German insurer Allianz (ALV:GR), was going to fire Gross before he stepped down.
It’s hard to manage a soft landing when falling from such heights. Janus will offer Gross the best it can. The company is run by Gross’s former colleague Richard Weil, who was once chief operating officer at Pimco. And Janus, which is based in Denver, will open a new office in Newport Beach, Calif., where Gross has long operated.
With a new star investor on board, assets will surely follow, and Janus, which was the fifth-largest U.S. mutual fund operator in 2000, will regain some luster. At least in the short term, Pimco will take a hit. Investors have been selling off Pimco’s mutual funds, according to Bloomberg News. Janus shares are going the other direction, with the company gaining about $690 million in stock value since the market opened.
Janus Capital can safely say it’s bigger than any one man.
