TCW’s Feud

While TCW was feuding with its top money manager, Pimco, based less than 50 miles away in Newport Beach, attracted some of the biggest inflows the mutual fund world has ever seen. Gross’s Pimco Total Return Fund, which had beaten 99 percent of peers in 2007 and 82 percent in 2008 by avoiding the fallout from the housing collapse, pulled in $50 billion in 2009 alone. Assets in the fund peaked at $293 billion in 2013. Firm-wide assets doubled to $2 trillion between 2010 and 2013.

The woes at Pimco, bought by German insurer Allianz SE in 1999, started around that time. In January 2014, Chief Executive Officer Mohamed El-Erian announced his departure amid clashes with Gross. By August of that year, assets in the main fund had shrunk to $222 billion, following lackluster performance in 2011 and 2013.

Gross was synonymous with the firm he co-founded, and easily the best known money manager in America. When he walked out, it was no surprise that money left, too, said Roge, who pulled his clients’ assets out of Pimco Total Return after the resignation. 

Worst Redemptions

Pimco managed $1.52 trillion as of June 30 this year, down from $1.88 trillion on Sept. 30, a few days after Gross departed for Janus. Three mutual funds previously run by Gross, Total Return, Pimco Unconstrained and Pimco Low Duration, led redemptions among U.S. bond mutual funds in the 11 months ended Aug. 31, data compiled by Bloomberg show.

While investors pulled money from Pimco, few followed Gross to Janus. His Janus Global Unconstrained Bond Fund had $1.4 billion in assets as of Aug. 31, even after Gross put in more than $700 million of his own cash, according to Janus.

Financial advisers and institutional money managers offered a range of reasons why not more money flowed to Janus, including his acrimonious split from Pimco, his lack of a track record at an unconstrained bond fund and the fact that Janus was better known for its stock funds.

Recent Performance

Gross’s recent performance hasn’t helped. Since he took over the Janus fund Oct. 6, it lost 2.1 percent compared with a gain of 2.3 percent for the Barclay’s Aggregate Index, a common bond fund benchmark. This year, the fund is down 1.7 percent, trailing 76 percent of similar funds, according to data compiled by Bloomberg.