As Gundlach Gains Assets, Is New Bond King Being Crowned?

When Pimco’s Bill Gross left the firm he founded last week, stunning both investors and even Pimco management with the news, did he also leave behind his claim to the title “bond king?”  Or was that mantle lost before Gross left the firm, as ValueWalk quipped on August 12?

Gundlach shines as PIMCO suffers

As Pimco engages in celebrated struggles with redemptions that followed a nearly yearlong battle inside the firm, losing an estimated $23 billion in funds in September, competitor Jeffrey Gundlach DoubleLine Funds has benefited.

While not garnering all of the redemptions from Pimco, Doubline is nonetheless up $1.65 billion in September, more than double the previous month. It has seen net inflows for eight consecutive months, according to a report by Jennifer Ablan from Reuters. The Doubline Total Return Bond Fund garnered the lion’s share of the net increase, with $1.32 billion of net inflows in September coming on top of $562 million in August, while Doubline as a whole witnessed $697 million roll in the door that month. Year to date the fund has experienced net inflows of $3.79 billion.

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As Pimco works to steady to ship and plug its leaking assets, there are those who are questioning if “Bond King,” Gross’s former moniker, is still applicable.

Jeff Gundlach: The next bond king

“Now that Wall Street’s ‘Bond King’ Bill Gross has stepped down from PIMCO, the massive firm he founded, it’s time for someone to take his place,” wrote Linette Lopez in Business Insider.

That new “bond king” may be a former LA punk band member who recently attempted to purchase his hometown football team, the Buffalo Bills. Jeff Gundlach could be this man.

“Unofficially, Jeff has already been the bond king for a while,” Josh Brown, CEO of Ritholtz Wealth Management, was quoted in the Business Insider piece as saying. “Whether we’re measuring by getting curve right or inflows. Maybe today just makes it official,” he said on September 26.

Interesting to note that Gundlach was once approached by Gross to “co-manage” Pimco. “I am CEO of the firm. We talked about working together, but I was never going to be the ‘co-guy,'” Gundlach was quoted in Reuters as saying. “I am CEO. That was never going to happen.”

This may be the time for the punk rock CEO to take center stage.

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Mark Melin is an alternative investment practitioner whose specialty is recognizing a trading program’s strategy and mapping it to a market environment and performance driver. He provides analysis of managed futures investment performance and commentary regarding related managed futures market environment. A portfolio and industry consultant, he was an adjunct instructor in managed futures at Northwestern University / Chicago and has written or edited three books, including High Performance Managed Futures (Wiley 2010) and The Chicago Board of Trade’s Handbook of Futures and Options (McGraw-Hill 2008). Mark was director of the managed futures division at Alaron Trading until they were acquired by Peregrine Financial Group in 2009, where he was a registered associated person (National Futures Association NFA ID#: 0348336). Mark has also worked as a Commodity Trading Advisor himself, trading a short volatility options portfolio across the yield curve, and was an independent consultant to various broker dealers and futures exchanges, including OneChicago, the single stock futures exchange, and the Chicago Board of Trade. He is also Editor, Opalesque Futures Intelligence and Editor, Opalesque Futures Strategies. - Contact: Mmelin(at)valuewalk.com