Gross' fund at Janus suffers worst monthly redemptions since October

Investor flows remain inconsistent for Janus Unconstrained Bond Fund, with $39.8 exiting in June

Jul 9, 2015 @ 2:05 pm

By Bloomberg News

The Janus Global Unconstrained Bond Fund suffered its worst monthly redemptions since bond legend Bill Gross started managing it in October.

Clients pulled an estimated $39.8 million from the bond fund at Janus Capital Group Inc. in June, bringing total assets to $1.45 billion as of June 30, according to data compiled by Bloomberg.

While the fund has grown from $13 million before Mr. Gross joined the firm in late September, its monthly investor flows have been inconsistent. Clients have pulled money in three of the nine months since the billionaire fund manager took over Oct. 6, withdrawing $13 million in May and $18.5 million in February, according to Bloomberg and Morningstar Inc. estimates.

Erin Freeman, a spokeswoman at the Denver-based firm, declined to comment on the redemptions.

(More: Gross fund netted $58 million in April)

Mr. Gross's fund has returned 0.9% in the past month, beating 98% of comparable funds, according to Morningstar data. The fund has lost 0.1% since Mr. Gross started managing it, as of June 8, putting it ahead of 58% of peers.

The fund was outperforming rivals in March and did well through most of April until European bonds slumped in the final days of the month. Performance slid from the 6th percentile against competitors in March to the 97th in May, according to Morningstar data.

Last week Janus said Kumar Palghat, who worked with Mr. Gross at Pacific Investment Management Co. for 10 years, will help him run the fund.

'TOO IMPORTANT'

Mr. Gross, 71, co-founded Newport Beach, Calif.-based Pimco in 1971, and joined Janus last year after losing a power struggle at the firm he helped build into a $2 trillion money manager at its peak.

Asset growth is no longer one of his defining metrics for success, Mr. Gross said in May. Still, helping turn Janus into a behemoth that for regulators is “too important to neglect” is one of his objectives, “as it is for CEO Dick Weil,” Mr. Gross wrote in this month's Investment Outlook. “But that day lies ahead of us.”

Mr. Gross runs separately managed accounts alongside the Unconstrained fund, including a $500 million mandate from a vehicle managed by George Soros's investment firm, Quantum Partners. He oversees a $272 million bond fund for Old Mutual Global Investors. Mr. Gross also put more than $700 million of his own wealth, estimated at $2 billion by the Bloomberg Billionaires Index, into the unconstrained fund.

Bloomberg estimated investor subscriptions for the Janus fund by computing the change in assets over the month that isn't accounted for by performance. The number may vary from actual figures and from estimates compiled by other data providers.

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