With Janus Henderson poised to announce its results tomorrow, the big news from the company is the news that Bill Gross, the controversial bond king that once ruled PIMCO, is to retire, aged 74. Gross co-founded PIMCO in 1971 and grew it into a fixed income powerhouse in the US and abroad.
He left PIMCO in 2014 to join Janus Henderson where he was responsible for the management of the Janus Henderson unconstrained bond funds.
“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,” Gross said in a statement. “So many friends and associates at my two firms to thank – nothing is possible without a team working together with a common interest.”
The unconstrained bond fund strategy that Gross was responsible for had under performed its three month LIBOR index since he joined Janus Henderson, nominal performance was still positive during his tenure at the firm. His total return strategy ended the year beating the US Aggregate Index, its benchmark, by 89 basis points.
His departure may end up being more cosmetic in terms of its overall impact on Janus Henderson. His fund management responsibilities devolve onto the global macro fixed income team at the firm, which has been working with him since he arrived in 2014. Janus Henderson said that Nick Maroutsos, who is co-head of bonds at the firm, will assume overall portfolio management responsibilities for the unconstrained bond funds with effect from 15 February.
Bill Gross is understood to be leaving the firm on 1 March, which will mark the end of an era in the world of bond funds. In his wake Janus Henderson will rename his funds in the US and Ireland into the Absolute Return Income Opportunities funds, which the company said better reflected the way they will be managed going forward.
Janus Henderson shares closed at 22.10 on Friday evening in the US. It will be interesting to see the degree to which Gross’ name still counts in terms of the overall value of the company.
The unconstrained bond fund strategy had been considered something of a ‘vanity project’ by some institutional investors, as Gross’ family owned just over 51% of the assets in the funds. However third party assets in his funds had not been stocking around, and Janus Henderson was not seeing the star quality it had been expecting when it took him on from PIMCO in 2014.