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The 'Bond King' Leaves His $2 Trillion Kingdom

Heavy drama played out this week — and not just on Shonda Rhimes' TV shows.

The bond-investing world was roiled by news that Bill Gross — the man known as "The Bond King" — has abruptly left the huge investment firm he founded in 1971. The departure left a lot of people scratching their heads on Wall Street.

"The natural question is: What's going on at PIMCO?" said David Kotok, chief investment officer at Cumberland Advisors. "There's all kinds of speculation" about why Gross left.

"And the answer is, it's speculation — and so we don't know," Kotok said.

Legendary bond investor Gross built Pacific Investment Management Co., or PIMCO, into a $2 trillion powerhouse. A unit of the German insurer Allianz SE, the company operates the largest bond mutual fund in the world. Over the decades, millions of retirees with pension funds have had some portion of their money under Gross' care.

For years, Gross has been described by many as a hard-driving boss.

Still, the firm maintained a good image under the leadership of Gross, 70, and his high-profile investing partner Mohamed El-Erian, 56. Earlier this year, El-Erian abruptly left PIMCO.

And earlier this week, the Wall Street Journal reported that the Securities and Exchange Commission is investigating a PIMCO fund for allegedly artificially inflating returns.

A number of unnamed sources have told various news outlets that Gross' behavior had become erratic, leading to clashes with other employees. A source familiar with the situation tells NPR that PIMCO was about to fire Gross if he didn't step down.

Gross has not yet given his version of events and was not available for interviews.

In a statement, PIMCO CEO Douglas Hodge said he was grateful for Gross' contributions but added that "over the course of this year, it became increasingly clear that the firm's leadership and Bill have fundamental differences about how to take PIMCO forward."

But Gross is not retiring. He will now be managing a bond fund at Janus Capital Group. That company's CEO, Dick Weil, issued a statement saying: " We are extremely proud to welcome Bill Gross, an investment industry icon, to Janus."

Shonda Rhimes has not commented on the intrigue.

Copyright 2021 NPR. To see more, visit https://www.npr.org.

NPR correspondent Chris Arnold is based in Boston. His reports are heard regularly on NPR's award-winning newsmagazines Morning Edition, All Things Considered, and Weekend Edition. He joined NPR in 1996 and was based in San Francisco before moving to Boston in 2001.
Marilyn Geewax is a contributor to NPR.
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