Even the owner of a Newport Beach, California, beauty parlor spent the weekend hearing about Bill Gross’s departure from Pacific Investment Management Co.
Mark McArdle, who owns the Images Salon, heard all about it at the communal lunch table after a round of golf Sunday in nearby Mission Viejo. Gross, who co-founded Pimco 43 years ago in Newport Beach, said on Sept. 26 that he was leaving for Janus Capital Group Inc.
“The whole table was in on the conversation,” said McArdle, who moved to the Orange County town from Los Angeles in 1982. “One of the guys was talking about how his boss will move up because of the changes in management.”
In Newport Beach, a town of 87,000 where the median household income of $109,677 is almost 80 percent above the state’s, the Bill Gross story is dominating conversations at hairdressers, restaurants and golf courses even as Pimco forbade employees to discuss the matter. Gross, who managed about $373 billion at Pimco, is a familiar sight to many in the seaside town, in a suit or carrying his yoga mat and gym bag.
“He’s going to manage a $13 million, million with an ‘m,’ global unconstrained bond fund after building an almost $300 billion, with a ‘b,’ fund,” said Mark Moehlman, a managing director at Beacon Pointe Wealth Advisors, who was sipping tea at the Starbucks at Fashion Island, near Pimco’s offices. “It’s a little bit like Pavarotti singing at the community fair.”
Moehlman, who said his wife is the Gross family’s dentist, said his firm has sold all its Pimco holdings. He said he’s known Gross for 37 years, and that the 70-year-old money manager is a local celebrity in Newport Beach, a palm-tree-lined town about 43 miles (69 kilometers) southeast of Los Angeles.
The local marina and yachting community is among the biggest in Southern California, with almost 10,000 boats docked within the 21-square-mile harbor area, according to the city’s website. The Wild Goose, a boat owned by actor John Wayne, who once had a home in Newport Beach, is still available for charter in the marina.
Newport Beach’s first yacht regatta was held in 1922 and the Balboa Yacht Club was founded two years later, according to the city website. Local businesses started to flourish and multiply, driven by demand from the military during the 1940s. After World War II, real estate values began to rise in the area, buoyed by an influx of new residents, according to the site. By the early 2000s, the town had grown as a tourist area with the addition of luxury hotels including the Balboa Bay Resort.