Gross' fund at Janus Capital suffers net redemptions as performance trails

February marks first month of outflows since bond manager joined firm

Mar 9, 2015 @ 2:17 pm

By Bloomberg News

Bill Gross's Janus Global Unconstrained Bond Fund suffered its first month of net client redemptions last month since he joined as performance returns trailed peers.

Investors pulled $18.5 million from the fund in February, leaving it with about $1.45 billion in assets, Chicago-based research firm Morningstar Inc. estimated. The fund has declined 0.8% this year, trailing 96% of similarly managed funds, Morningstar said.

(More: Janus unconstrained fund attracts least net new money since Bill Gross took over)

The redemptions are a setback for Mr. Gross, 70, who fueled much of the fund's growth last year as assets surged from about $13 million before he joined. Richard M. Weil, chief executive officer of Janus Capital Group Inc., said on a Jan. 22 conference call that more than $700 million of the fund's assets came from Mr. Gross himself.

The firm saw an 18% increase in profit last quarter as it attracted net new money for the first time in more than five years. Janus reported $2 billion in net subscriptions for the fourth quarter, mostly into bond funds.

Mr. Gross and his family held a 51.2% stake in the fund as of Dec. 31, according to a Janus filing, with a market value of about $739 million at year-end.

Mr. Gross previously ran the world's biggest bond fund, the Pimco Total Return Fund, at Newport Beach, Calif.-based Pacific Investment Management Co., the firm he co-founded in 1971 before abruptly departing for Janus on Sept. 26.

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