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Bill Gross to join Janus after earning record redemptions at Pimco fund

Bill Gross, 70, seen on Nov. 17, 2011

Bill Gross, 70, seen on Nov. 17, 2011 in Beverly Hills, Calif., is leaving Pimco amid record redemptions at his main mutual fund, the $222 billion Pimco Total Return fund. Credit: Bloomberg News

Bill Gross, co-founder and chief investment officer of Pacific Investment Management Co., will join Janus Capital Group Inc.

Gross, who has presided over the world's biggest bond fund for almost three decades, will start Sept. 29 at a new Janus office in Newport Beach, Calif., and will begin managing the Janus Global Unconstrained Bond Fund on Oct. 6, according to a statement from Janus.

“I look forward to returning my full focus to the fixed income markets and investing, giving up many of the complexities that go with managing a large, complicated organization,” Gross said in the statement. “I chose Janus as my next home because of my long standing relationship with and respect for CEO Dick Weil and my desire to get back to spending the bulk of my day managing client assets.”

Gross, 70, is leaving Pimco amid record redemptions at his main mutual fund, the $222 billion Pimco Total Return fund. The firm is also struggling with negative publicity stemming from the abrupt departure of its former chief executive, Mohamed El-Erian, which was followed by the biggest management overhaul in its history. Gross’s Total Return mutual fund has experienced 16 straight months of redemptions as returns trailed rivals and investors sought alternatives to traditional bond strategies in anticipation of rising interest rates.

“While we are grateful for everything Bill contributed to building our firm and delivering value to PIMCO’s clients, 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,” Douglas Hodge, Pimco’s CEO, said in a separate statement.

Janus Rise

Janus rose 36 percent to $15.06 at 9:40 a.m. in New York. Allianz SE, the German insurer that owns Pimco, declined as much as 7.4 percent in Frankfurt, the most in three years.

Pimco has started succession process and plans to announce a replacement for Gross “within hours,” Pimco’s owner Allianz said in a statement to the stock exchange today.

Weil and Gross know each other from Pimco, where Weil worked from 1996 to 2010. He served as general counsel at Pimco and later became a managing director and chief operating officer. He was hired to run Janus in January 2010.

El-Erian, Gross

“It was not without great thought and deliberation over quite some time that I decided to begin this next chapter,” Gross said in an emailed statement from Janus spokesman Steven Shapiro. “It is a time for me to reduce executive and people management responsibilities at a larger firm and focus on the pure aspects of portfolio management at a smaller one. Janus is the right fit at the right time in my career -- and my life.”

Janus, based in Denver, managed $178 billion in assets as of June. The company has struggled to stem defections even as it expanded the fixed-income team and created another to focus on multi-asset investing.

El-Erian, 56, widely viewed as the successor to Gross, left in March after six years, leaving his dual roles of CEO and co-chief investment officer. He was the first Pimco manager to share the title of investment chief with Gross.

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