Old memories are hard to shake off. Jeff Gundlach, who was fired from TCW Group Inc, has hired two portfolio managers from the company. The founder, CEO and CIO of DoubleLine Capital released a statement today, confirming the appointment of Brendt Stallings and Husam Nazer as new members of the top ranking bond firm. DoubleLine Capital will open a new unit, DoubleLine Equity LP, where Stallings and Nazer are expected to do their magic. Gundlach’s firm has already amassed $53 billion under management in three years, and looks to expand into the stock market as the bond yields hit record low levels.
Like many other astute investors, Gundlach has also stated that the future looks stronger for equities but bleaker for bonds. In the past few weeks, we have seen a renewed iteration of this stocks vs bonds thesis, Gavyn Davies of Fulcrum Asset Management and David Tepper of Appaloosa Management have also stated similar convictions. Gundlach’s competitor in bond market, Bill Gross of PIMCO (Pacific Investment Management Co) initiated investments in the equity market about three years ago. However, Gross does not see the growth in one sector outpacing the other, while Gundlach seems more excited about higher growth in the equity market.
For much of the past decade, Crispin Odey has been waiting for inflation to rear its ugly head. The fund manager has been positioned to take advantage of rising prices in his flagship hedge fund, the Odey European Fund, and has been trying to warn his investors about the risks of inflation through his annual Read More
“Equities may be challenged in the near term,” Gundlach said in a Bloomberg Summit in September, “But I doubt you’re going to have this lost decade or lost 15 years of equities again.”
Moreover the bond king has stated in a recent interview that another recession is in works for US economy. He also said that easing rounds in Japan and the weakening yen would produce a significant investing opportunity.
“We’re in this predicament owing to a simple fact,” he said. “The United States has been spending [over] 50% more than it’s been taking in in taxes.” Addressing the budget deficit will definitely be costly, he also added that an “instant recession” will ensue if deficits are reined in too quickly.
Stallings and Nazer have previously managed $5 billion at TCW. Stallings managed TCW Growth Equities I (MUTF:TGGEX), while Nazer headed TCW Small Cap Growth I (MUTF:TGSCX). The new portfolio managers are expected to add five investment officers to manage the stock holdings. TCW Group has $135 billion in assets. Carlyle Group LP (NASDAQ:CG) offered to buy TCW from Societe Generale SA (PINK:SCGLY) (EPA:GLE), taking a 65 percent stake in the bond firm. The acquisition was later temporarily blocked by the court on grounds that it violated TCW’s contractual agreement with EIG Global Energy Partners LLC. A decision is expected after Jan 30th.