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Bond King Bill Gross says happy to get back to investment roots

Published 04/10/2014, 22:14
Updated 04/10/2014, 22:20
© Reuters Bill Gross, co-founder and co-chief investment officer of Pacific Investment Management Company (PIMCO), speaks at the Morningstar Investment Conference in Chicago
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(Reuters) - Bill Gross, in his first interview since quitting asset manager Pimco, told Barron's magazine he was "uniquely exuberant" about giving up management responsibilities and was excited to get back to his investment roots.

"Managing money is in my blood," Gross, who is the co-founder of Pacific Investment Management Co., told Barron's this weekend. "I like to get up at 5:30 in the morning and make money for clients and compete against other money managers. That's something that doesn't go away. I am obsessed with delivering value to investors and winning the game from a personal standpoint. Retiring at this point in my career just doesn't suit me."

Gross, the bond market's most renowned investor, quit Pimco for distant rival Janus Capital Group Inc (N:JNS) on Sept. 26, the day before he was expected to be fired from the huge Newport Beach, Calif. investment firm he co-founded more than 40 years ago. Pimco is a unit of Germany's Allianz SE (DE:ALVG).

Gross, 70, had been clashing with the firm's executive committee and had threatened to resign multiple times, a source familiar with the situation said.

"I was always an investment guy, and the other stuff: hiring, paying people, planning, and so on, became a problem for me," he told Barron's. "I am uniquely exuberant about clearing all that stuff off my dish."

Gross has been given control of the tiny $13 million Janus Unconstrained Bond fund in the expectation that at least some of the clients who invested in his $200 billion Pimco Total Return fund will follow him to his new home.

"I'll still be intense," Gross said. "I figured out long ago that I can't change that. But the intensity and decibel level drop a bit in a smaller place. Also, common sense suggests that it will be easier to implement ideas in a $100 million portfolio than in a fund with more than $200 billion."

"The bond paparazzi will be less interested in Janus than they were in Total Return," Gross said.

Pimco clients withdrew a record $23.5 billion from the Pimco Total Return fund in September, the vast bulk in the three days after Gross announced his shock departure.

Gross's move from Pimco was the equivalent of an earthquake in the fund management industry, potentially threatening the company's dominant position in bond investing. It had almost $2 trillion in assets under management at the midpoint of this year, but institutional investors in particular have been alarmed at stories of infighting prompted by Gross's allegedly imperious management style.

© Reuters. Bill Gross, co-founder and co-chief investment officer of Pacific Investment Management Company (PIMCO), speaks at the Morningstar Investment Conference in Chicago

Gross's departure, coming eight months after his co-chief investment officer Mohamed El-Erian walked out, has prompted pension funds and consultants to re-evaluate their use of Pimco funds.

(Reporting by Jennifer Ablan; Editing by James Dalgleish)

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