Losing Control

Later that day, Gross met with Hodge and Jacobs, who presented a plan to announce his retirement at year-end, praising his accomplishments over his long career. Gross asked about the “sidecar” structure he had discussed with Diekmann. Jacobs declined and instead offered that Pimco would help him start a new company or fund.

“That’s a bone even a dog wouldn’t pick,” Gross replied.

Allianz spokeswoman Petra Brandes declined to comment.

Gross knew he had lost control. He called DoubleLine co- founder Gundlach, a prominent bond investor who had been pushed out by TCW Group Inc. five years before. He also re-engaged in conversations with Janus’s CEO Weil about partnering with him.

Gundlach Meeting

When he met with Gundlach, 55, the next day, Sept. 17, at Gundlach’s house near Santa Monica, they discussed the possibility of employment. Gross said he’d be willing to work for $1, indicating they could work out details later, according to Gundlach. The two men parted without coming to a decision.

The following week, Gross’s last at Pimco, he was told there would be a meeting scheduled to discuss his future on Friday, Sept. 26, at 2 p.m. and management had all but decided to oust him.

He called Janus’s Weil, who said that the firm would have an office ready for Gross.

At 5:28 a.m. California time on Sept. 26, Janus announced that Gross was joining them to manage a start-up fund with about $13 million, surprising Pimco and Allianz and rattling markets.

Since then, some managers who had left under Gross have come back. Seidner rejoined Nov. 12. Jeremie Banet, who left in June to run a food-truck business, is back as an executive vice president. Nobel Laureate Michael Spence, who departed in February, is returning as a consultant.

Bonus Pool

Less than two weeks after Gross left, the firm announced it added five people to its equities team, reporting to Maisonneuve, CIO for equities. Hodge has said Pimco will announce more new hires in the near future.

The firm, which still has $1.87 trillion under management, has the money to pay for top talent. Gross and El-Erian together received about $520 million in bonuses last year, roughly a third of the entire payout pool.

Pimco has also introduced a 225 million-euro ($279 million) award program that applies to “all employees that are not participating in the Pimco profit pool,” Munich-based Allianz’s Chief Financial Officer Dieter Wemmer said on a Nov. 7 conference call.

As Pimco’s leaders work to restore calm, the Total Return Fund has beaten 99 percent of peers in the past month, as bonds rallied. Redemptions from the fund slowed to $9.5 billion in November, Pimco said yesterday.

Gross has resumed some of his earlier routine. Since Sept. 29, he has driven from his cliffside mansion in Laguna Beach to an office in a not-yet-finished building that’s almost identical to Pimco’s new headquarters, a five-minute walk down the street.

Soros Backing

His new fund has attracted more than $1.2 billion of client deposits since he started, according to a person familiar with the matter -- a fraction of the billions that flowed out of Pimco since his exit.

George Soros, the former hedge-fund manager famed for successfully betting against the Bank of England in 1992, committed $500 million to a separate account with a strategy similar to his unconstrained fund. Scott Bessent, Soros’s chief investment officer, visited Gross in Newport Beach the week after he joined Janus, according to a person familiar with the matter.

Soros’s firm saw an opportunity to invest with a talented money manager while he was still running a small amount of money, according to the person.

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