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Bill Gross Is ‘Off’, Will Leave Us ‘For Another Destination’ Where The Seas Are ‘Smoother’

"I’m off – leaving this port for another destination with high hopes, sunny skies and smooth seas!"

Well, Bill Gross is retiring.

In their career obituary, Bloomberg had the common decency to refer to Bill as just “bond king” in the initial title (which has since been changed).

CNBC, on the other hand, decided to go with “one-time bond king”, presumably out of deference to that lunatic Jeff Gundlach. “After leaving Pimco, Gross was never able to regain the standing he once held, and the fund he ran for Janus Henderson had badly underperformed in the nearly five years he had been there”, the network wrote, an obsequious nod to Jeff, who apparently has free rein to take over any segment he wants at any time.

It’s true that Bill has had a rough go of it post-Pimco. The Janus Henderson Global Unconstrained Bond Fund lost 4% last year and assets fell below $1 billion, down sharply from above $2.2 billion just 12 months previous (bottom pane).

Gross1

(Bloomberg)

You might recall that the fund had its worst day ever during the Italian bond meltdown on May 29 (top pane).

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Here’s What Went Wrong For Bill Gross This Week And Here’s Why The Trade May Continue To Move Against Him

The selloff in BTPs sparked a safe haven bid for German bunds to the detriment of Bill’s long-standing bet on a narrowing of the UST-bund spread, which remains near all-time wides.

USTBund

(Bloomberg)

But Bill’s legacy will hardly be defined by that fund. His place in history is cemented.

And really, it’s not clear there was much point anymore at Janus. As Bloomberg’s Brian Chappatta wrote just two weeks ago, “as of September 30, Gross and his family’s personal stake in Global Unconstrained was about $566 million, or 51.6% of the fund’s total assets.” Chappatta went on to say that Bloomberg’s analysis of public holdings data revealed only two other investors in Global Unconstrained.”

In other words, Bill’s underperformance didn’t really matter to anybody but himself, which goes a long way towards explaining why, back in August, Janus CEO Dick Weil remarked that “the underperformance we’re seeing is challenging and disappointing to him more than any of us.”

Right. On Monday, in announcing Gross’s retirement, Weil said this:

Bill is one of the greatest investors of all time.

There you go. All jokes aside (and there are certainly a lot of them), his legend will live on and will ironically be enhanced by any wise cracks folks are inclined to make.

For his part, Bill offered the following:

I’ve had a wonderful ride for over 40 years in my career – trying at all times to put client interests first while inventing and reinventing active bond management along the way. So many friends and associates at my two firms to thank – nothing is possible without a team working together with a common interest. I’ve been fortunate to have had that. And thank you to all of my past clients for their trust and support. I learned early on that without a client, there can be no franchise. I’m off – leaving this port for another destination with high hopes, sunny skies and smooth seas!

Happy trails, Bill.


 

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