NEW YORK—Bill Gross, once the bond market's most influential investor, will retire from Janus Henderson Group Plc in coming weeks, ending attempts to reclaim the stature he enjoyed leading the world's largest fixed-income investing firm.
Gross, who turned to investing after serving as U.S. naval officer, co-founded Pacific Investment Management Co in 1971, attaining rock-star status in investing circles as he attracted hundreds of billions of dollars in assets. Under his watch, Pimco blossomed into a $2 trillion asset-management powerhouse, one so influential that the U.S. Federal Reserve tapped it to help implement its program of emergency bond purchases in the financial crisis in 2008.
At Janus, however, Gross was unable to repeat his earlier success, with the performance of the fund he managed ranking near the bottom. Gross told Reuters on Feb. 1 that low rates are distorting returns.
His tenure at Pimco ended abruptly and acrimoniously in September 2014, when he was ousted. His flagship Total Return Fund—which hit a peak of $292.9 billion in assets in April 2013—was hemorrhaging assets. At the end of April 2015, the Pimco Total Return Fund had lost its title as the world's biggest bond mutual fund to the Vanguard Total Bond Market Index Fund, which had $117.3 billion in assets.
Gross, 74, will leave Janus on March 1, and will manage his personal assets and charitable foundation with two of his three children, the company said in a statement on Feb. 4.
"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," Gross said in the news release.
Gross, whose net worth Forbes magazine said on Feb. 4 has declined to $1.5 billion from $2.5 billion as recently as June 2018, endured a rocky four years of performance at Janus.
Three decades of falling U.S. interest rates and moderating inflation starting in the early 1980s boosted returns on bond funds managed by Gross and his rivals.
Over the same period, corporations offered fewer pensions and U.S. investors, increasingly responsible for their own savings, turned to mutual funds for professional asset management. Each factor helped create significant demand for services Pimco offered as a bond specialist.
Gross conceded to at least one "bad trade" during his tenure at Janus, betting that German and U.S. government bond yields would move closer together. And his assertions that bonds were now in a bear market ran against continued demand for safe assets and easy monetary policy that kept rates low.
Jeffrey Gundlach, anointed as Wall Street's new "Bond King" in recent years, told Reuters in 2014 that when discussing their potential legacies, Gross spun an analogy to National Basketball Association star players Kobe Bryant and the younger LeBron James.
"I am Kobe. You are LeBron James," Gross told Gundlach. "I have five rings, you have two rings—probably going to five," a reference to the number of NBA championships the two players had each won. Bryant retired from the NBA in 2016 after winning five championships; James had won three as of 2018.