MiB: Bill Gross still standing

April 2, 2022
9:30 am

Justice News Flash Report

MiB: Bill Gross still standing

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This week, we interview Bill Gross, the “bond king” who has been a pioneer in fixed income investing for 43 years. Gross co-founded Pacific Investment Management in 1971 and served as managing director and chief investment officer. Gross manages PIMCO’s Total Return Fund, which with a total return of $293B, is the largest mutual fund in the world. Gross advised the Treasury on the role of subprime mortgage bonds and was named Morningstar’s ten-year fund manager in 2010. He is the author of several books, including the just published “I’m Still Standing: Bond King Bill Gross and PIMCO Express. “

In the 1970s, ERISA law mandated diversification among asset managers, including territoriality. The Newport Beach, California-based company won AT&T’s pension fund as their first big customer, and the floodgates opened.

We discussed his investment outlook – IOs – which he writes about every month as the company’s way of “saying hello” to the industry. They become the main course of meeting new customers.

we discuss mary childnew book”Bond King: How One Man Created a Market, Built an Empire, and Lost Everything.” Gross collaborated with the book, answering questions and assisting in the fact-checking process.

He strongly disagreed with allegations that PIMCO manipulated the Treasury during the financial crisis:”we didn’t bully anyone. He noted that neither he nor the company called anyone at the Treasury Department or threatened to sneak into the market. PIMCO is the largest holder of mortgage-backed bonds from Fannie Mae and Freddie Mac. Of course, they are mortgages The 800-pound gorilla in the bond, but Gross claims this is a strategic advantage for the company, not a political one.

Gross recounted the pain of being fired after 43 years, noting, “When you kill a king, you better make sure he’s dead.” He said he was never eccentric, but “I’ve always been an eccentric character.”

He blamed the dismissal on two factors: First, he said he supported low fees, but PIMCO wanted to raise fees, including various “2 & 20” funds. But the biggest reason, according to Gross, is that he and Mohamed El Arian received huge bonuses. If Gross is fired (El Arian has already left), it will be a $1 billion annual bonus that will be distributed to other senior leadership. “I’m 72 and they think it’s time for me to go.”

We’re also now discussing the state of the bond market – he thinks the Fed is “well behind the curve” and that 4-5% inflation is “baked in for years to come.” He thinks 50 or 100 basis points is about what the economy can handle. “Bonds are definitely to be avoided,” Gross observes.

List of his favorite books here; our conversation transcript is available here on Monday.

You can stream and download our full conversations, including podcast add-ons iTunes, Spotify, stapler, Google, Bloombergand Akaster. All early podcasts on your favorite podcast host are available find here.

Be sure to check out our Master of Business Next week with Bain Capital’s co-managing partner Jonathan LaVine and Bain Capital Credit’s Cheif Investment Officer. He is co-chair of the Columbia University Board of Regents.