Montreal Gazette

King of bond market wins $81M battle

- JOHN GITTELSOHN

For Bill Gross, the long goodbye is finally over.

More than two years after the legendary bond manager was ousted from Pacific Investment Management Co. — the firm he co-founded and built into a US$2 trillion asset manager — he settled a bitter legal dispute with a public rapprochem­ent.

Pimco, where Gross shot to fame as the king of the bond market, agreed to pay US$81 million — a modest sum given the fortune he amassed during his 43 years there. Pimco also agreed to dedicate a new “Founders Room” at its headquarte­rs in honour of Gross and others who launched the firm in 1971, a nod to his role as its most famous market prognostic­ator and manager of the Pimco Total Return Fund, once the world’s largest mutual fund. Pimco also named him as a director emeritus of the firm’s charitable foundation.

Gross will partially match the US$81 million settlement to make a total charitable contributi­on of US$100 million, according to a person with knowledge of the matter. “Pimco has always been family to me, and, like any family, sometimes there are disagreeme­nts,” Gross said in a statement, which added that he is glad “to know that Pimco is in capable hands.”

For Gross, now 72, the developmen­t brings an end to a long struggle in the twilight of his career to overcome his split with the firm he co-founded and turn the page at Janus. For Pimco, the resolution offers the firm, which managed US$1.5 trillion as of Dec. 31, a chance to move on from Gross’s legacy, according to William Thompson, Pimco’s CEO from 1993 through 2008. “It’s a new day,” said Thompson. Gross sued Newport Beach, Calif.-based Pimco, contending he was ousted by a “cabal” of executives who wanted a larger share of his bonus, which was US$290 million in 2013. He also asserted the executives wanted to offer more high-fee products to investors rather than Pimco’s traditiona­l bond funds. Gross, who didn’t reply to a request for comment, now runs the US$1.9 billion Janus Global Unconstrai­ned Bond Fund.

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Bill Gross

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