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.”

Local Celebrity

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.

Fashion Island

Aside from Gross, the best-known local resident is developer Donald Bren, the billionaire chairman of Irvine Co., which owns Fashion Island, an upscale retail area across the street from Pimco’s new 20-story office tower, as well as many of the offices in the surrounding prestigious Newport Center commercial area.

“This is Bren-ville,” Moehlman said, gesturing toward the round outline of Fashion Island, which features upscale stores such as Neiman Marcus, Vineyard Vines and Restoration Hardware, along with an outpost of the trendy Fig & Olive Mediterranean restaurants.

Pimco -- Newport Beach’s second-biggest employer, with about 1,100 local employees, according to a 2012 city report -- declined to comment on its instructions to employees on talking about Gross’s departure, which followed clashes with management. Three Pimco workers walking to lunch in the Fashion Island area declined to comment on Gross’s departure, saying they were told not to speak about it. A woman at Starbucks whose husband works for the $2 trillion bond firm also said she was instructed not to discuss the situation.

Fund Redemptions

Gross’s departure has sparked an investor retreat from his former firm’s funds. The Pimco Total Return Fund suffered an estimated $23.5 billion of redemptions last month, its worst month ever for withdrawals. The largest daily redemption occurred the day Gross left, the firm said yesterday in a statement. Gross, who will remain in Newport Beach, will run a startup fund with few assets for Denver-based Janus.

At Newport Beach’s Resort at Pelican Hill, where executives play rounds of golf on the Tom Fazio-designed golf course or meet for drinks at the Pelican Grill, visitors spoke of shock at the upheaval. Chris Britt, a founding partner at Newport Beach- based Marwit Investment Management LLC, said he did a double- take when he saw headlines cross on Gross’s departure while working out on a life-cycle machine at the gym early on the morning of Sept. 26.

‘A Stunner’

“Everybody was stunned,” Britt said while chatting in the lobby at Pelican Hill. “People were certainly noticing the soap opera over the past year or so, but it was still a stunner to hear that the founder of Pimco left.”

Robert “Buck” Bennett, president of SeaCountry Group, an Encinitas, California-based homebuilder, said Pimco is “crazy” for letting Gross go. Bennett was having drinks with bankers at the local Fleming’s Prime Steakhouse & Wine Bar to discuss a possible business deal in Newport Beach.

“Bill Gross is Pimco,” Bennett said, giving heavy emphasis to the “is.” “You have to be dumb, blind and crazy to not know about Bill Gross and all that’s been going on there.”

Gross -- with a net worth of about $2 billion, according to the Bloomberg Billionaires Index -- is sometimes overshadowed locally by Bren, said Moehlman of Beacon Pointe. The 82-year-old developer’s company is the largest land owner in California, making him worth about $15 billion, according to data compiled by Bloomberg.

Not Visible

Gary Borquez, a regional sales manager at Corsearch, part of legal, tax and finance consulting firm Wolters Kluwer, and a 16-year Newport Beach resident, said he read about Gross’s departure in local papers.

“I am sure it’s a big dinner conversation in some families, but not so much in my circle,” Borquez said. “He’s not very visible in this community -- not like Don Bren, for example.”

Most locals said the bond powerhouse will continue to be one of the larger employers in this seaside community.

“Pimco isn’t just about one man,” Michael Lutton, managing director at Newport Beach-based commercial real estate developer Tieback Holdings LLC, said over a drink at Fleming’s. “You don’t have a one-man shop in a 440,000-square-foot building.”