Bill Gross, the one-time “bond king” with a checkered work relationship history, has lost the co-manager of his Janus Global Unconstrained Bond Fund. Gross, 72, left bond giant PIMCO in a cloud of acrimony that is still being litigated today. He joined Janus in October of 2014. Kumar Palghat, his co-worker from PIMCO, was brought aboard nearly a year ago and was seen as part of the fund’s continuation strategy when Gross retired. Those plans now appear in tatters.
“References to Kumar Palghat are deleted”
Bill Gross has a history of not playing well in the sand box with others. At PIMCO what appeared as a “cat fight” between Gross and his last hand-picked successor, Mohamed El-Erian, 57, ended in a nasty divorce, one that is still being litigated today. Gross, known for his colorful blog posts at PIMCO, has carried this forward with piercing market commentary at Janus as well.
It was thanks to a lightly publicized note in a Securities and Exchange Commission regulatory filing, first reported by Steven Foley in the Financial Times, that we learned of the latest departure. Under the heading of “investment personnel” in the fund’s filing it notes: “Effective July 28, 2016, references to Kumar Palghat are deleted.”
In communist dictatorships in the past, it generally wasn’t positive when someone was “deleted” without any explanation. In Palghat’s case, the departure occurs with him moving to another location inside Janus.
Palghat to focus on new Janus fund with former Kapstream colleague
Palghat, for his part, knew what he was getting himself into. He worked with Gross from ten years at PIMCO. He came over to Janus in July 2015 when they acquired his investment firm, Kapstream Capital Pty LTD.
Palghat focus will be on a new exchange-traded fund, Janus Short Duration Income ETF, which he will manage with former Kapstream portfolio manager Nick Maroutsos.
For Gross the moves comes as performance in his Janus Global Unconstrained Bond Fund had turned positive. The fund is up 3.7% year to date as of Wednesday, beating 65% of the competition, Bloomberg noted. The fund took early losses as Gross was getting adjusted, sometimes not following his own investment advice. The fund, whose goal is to beat the three-month London Interbank Offered Rate (LIBOR) by 2 to 3 percent, is up 2.8 percent since Gross took over in 2015.