Gross giving himself four years to re-establish track record

Money manager says competitive juices still flowing strong

Mar 2, 2015 @ 9:53 pm

By Bloomberg News

Bill Gross, the money manager who jumped to Janus Capital Group Inc. in September from the bond giant he co-founded, said he'll keep trading for the next two to four years to prove he can still beat the market.

“I wanted to show clients and the world, to the extent that they're interested, that I can continue to produce a track record like I did at Pimco,” Mr. Gross said in a Bloomberg Television interview. “I won't have as much time, I won't have five to 10 to 15 years leeway like I had at Pimco to do that, but certainly for the next two, three, four years. I'm a very competitive person and I like to post numbers that are better than the market and better than the competition.”

Mr. Gross, 70, became a billionaire and earned his reputation as the mutual fund industry's bond king by building Pimco into a $2 trillion money manager, at its peak, with some of the highest returns in the business. The Pimco Total Return Fund, which he managed until he left, ballooned to $293 billion in April 2013, before performance faltered and clients started to pull money amid concern that interest rates would rise.

Client withdrawals accelerated when Mr. Gross left the Newport Beach, Calif.-based firm after losing a power struggle with management. Pimco Total Return's assets had fallen to $134.6 billion as of Jan. 30.

INTEREST RATES

Mr. Gross started running the $1.5 billion Janus Global Unconstrained Bond Fund for Denver-based Janus on Oct. 6. Since then through last week, that fund has been mostly flat, trailing 54% of its peers, according to data from Chicago-based research firm Morningstar Inc.

Mr. Gross has invested more than $700 million of his own wealth in the Janus unconstrained fund. In today's interview, he said he joined Janus with a smaller, more flexible fund to show that he could once again establish a top mark.

Discussing his outlook for U.S. interest rates, Mr. Gross said the Federal Reserve may be conservative in its approach over the next two years. He said a 0.25 percentage point increase may be coming in June, with 2% the likely top in the Fed's rate-raising cycle.

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