‘Bond king’ Gross keen to become ‘giveaway king’
COUNT Bill Gross among the world’s biggest philanthropists. The bond investor has already given away as much as $700m and eventually will donate his remaining $2bn fortune, a figure that’s “staggering, even to me”, he says.
“I define success differently now than five or 10 years ago,” Gross adds. “Success in the early years was business-related, and asset growth-related, and of course, with family was related to how well your son or daughter was doing on the soccer field.”
Today, “success becomes a function of what we can do with the rest of the world, to help others”.
Gross, 71, amassed his wealth as co-founder of Pacific Investment Management Company (Pimco) and built his reputation as the “bond king” by generating years of industry-leading returns as manager of the Pimco Total Return Fund. In 2013, when the firm’s assets approached $2-trillion, Pimco paid him a bonus of $290m.
The same year, hedge fund manager Carl Icahn, in a taunt on Twitter, challenged Gross to join other billionaires in leaving the bulk of his wealth to charity. Two days later, Gross said he and his wife, Sue, would give it all away.
UNTIL now, Gross hadn’t discussed his total giving to date. “Sue and I try and keep it quiet,” he says. “We’re not the type to attend functions and parties and galas. We like to work underneath, so to speak.”
While Gross may donate with less fanfare than other billionaires, he is hardly anonymous.
There is a William H Gross Stamp Gallery at the National Postal Museum in Washington; a Sue and Bill Gross Stem Cell Research Center at the University of California, Irvine; and a Sue and Bill Gross Skywalk at the Cedars-Sinai Medical Center’s Advanced Health Sciences Pavilion in Los Angeles.
The couple, who live in Laguna Beach, California, do most of their giving out of a family foundation that mainly supports healthcare, medical research and education. They have also made personal gifts to needy American families.
More recently, Gross says he has taken an interest in Give Directly, an organisation that makes targeted donations via mobile payments to the extremely poor in Africa.
“Most Africans have cellphones, which is hard to believe,” Gross says. “So if you can do that and contribute $25 or $50 to someone in Uganda that of course you haven’t met, that’s almost as good as outperforming the market.”
IN 2005, Bill and Sue Gross gave $23.5m to Duke University, his alma mater.
Other major gifts include $20m to Hoag Memorial Hospital Presbyterian in Newport Beach, also in 2005; $10m to the University of California, Irvine, in 2006; $20m in 2012 to Cedars-Sinai in Los Angeles; $20m in 2013 to the medical charity Mercy Ships to fund the construction of a floating hospital; and $10m to Mission Hospital in Laguna Beach in 2014.
These days, Gross is not accumulating wealth like he once did; he now runs a $1.5bn fund for Denver-based Janus Capital Group, tiny compared with the $293bn flagship he once oversaw at Pimco.
Some of the couple’s fortune is invested in that vehicle, the Janus Global Unconstrained Bond Fund. Gross details some of his other investments, personally and on behalf of the foundation. They include closed-end municipal bond funds and stocks such as Procter & Gamble and Johnson & Johnson.
Gross says he and Sue do not expect to live long enough to give away everything and so his three children will have to finish the job.
Reflecting on mortality in his most recent monthly investment outlook for Janus, Gross wrote: “The ‘responsibility’ for a life’s work grows heavier as we age and the ‘unrest’ less restful by the year.”