Contenders range from the obvious (do you regret having had to walk out on Pimco, the bond manager you founded 44 years ago?) to the strange (why did you wear sunglasses while addressing an audience at that Morningstar conference?).Unfortunately, my job in compiling those questions was made simpler by the demands of Mr Gross’s public relations team at Janus Capital, his new employer.
“Bill will only talk about investment themes,” one PR member told me. “What went on at Pimco is old news. We have all moved on from that.”
It seems I did not get the memo. What we have all moved on from is the 70-year-old’s rather sharp exit at the end of September from the world’s largest bond manager to Janus, the fund company run by his former operating chief, Richard Weil.
Mr Gross has since admitted leaving Pimco before he was pushed by his executive committee. That departure followed months of outflows from his Total Return fund, the world’s biggest at $143bn, and continued rumours of infighting — rumours that first took hold when Mohamed El-Erian, Mr Gross’s heir apparent, left Pimco in January last year.
“We are just not going to be addressing any of that,” reaffirms the PR executive.
Thankfully, Mr Gross was happy to share his views on the global economy and on one of his seemingly favourite topics: quantitative easing.
“Too little, too late,” he calls the long-awaited plan from Mario Draghi, president of the European Central Bank, to revitalise the eurozone economy with a €60bn a month bond-buying programme.
“I don’t think QE will work as well in Europe as it did in the US,” says a softly spoken and measured Mr Gross, who was once chased out of Las Vegas for counting cards. “There are only a limited number of securities to buy and interest rates are now so low that it is not necessarily the case that [banks will use] the money to invest in the real economy.”
On the subject of US interest rates he says that he expects the US Federal Reserve to enact two rate rises this year, with the first 25 basis point increase coming in June or July.
“We will probably know by March for sure,” says the former navy officer. “In the March meeting, the Fed will either keep their patient language or they will drop it, and that will be the signal as to whether or not the rise will come in June or whether it is later.”
And of the Swiss National Bank’s recent decision to scrap its currency ceiling, which sent the franc soaring against the euro, he says: “It proves that there is no such thing as a safe haven in terms of investment.”
Despite now running a fraction of the assets he managed at Pimco — Mr Gross’s Global Unconstrained Bond fund has $1.4bn of money, half of which is his own — investors continue to take what he has to say very seriously.
One senior executive at a large European pension fund says: “Bill Gross is the greatest investor of all time.”
High praise, but Mr Gross has made a lot of investors, and many of his colleagues, very rich since he founded Pimco in 1971, taking the company’s assets under management from zero to around $1.9tn at the time of his September departure.
He has more than his fair share of detractors too, particularly when it comes to the performance of the Total Return fund. It had suffered 17 consecutive months of withdrawals by the time Mr Gross departed. It is now half the size it was at its peak in 2013.
“The world has moved on from Bill Gross,” says one asset manager at a rival fund company. “He has gone from hero to zero.”
Those less critical acknowledge that the Total Return fund had become too big for anyone to run effectively — something Mr Gross had recognised himself. Before he was forced out of Pimco, Mr Gross had proposed taking on a smaller role. He would have stepped down as chief investment officer, handing over management of the Total Return fund to a successor and instead focusing on the smaller closed-ended funds he ran.
That never came to pass but it is clear the man who was named Morningstar’s fixed income manager of the decade in 2010 is mindful of difficulties posed by the size of a fund.
“When I joined Janus my intention was not to build Pimco part II; it was to move into a smaller office and a smaller trading room, and to have more flexibility in terms of positions. I very much appreciate that,” says Mr Gross from his office in Newport Beach.
“There is no doubt that having a fund grow is important to stockholders and it is important to me from an ‘attaboy’ standpoint, but I am certainly not going to try and replicate the company that is only two blocks away from where I am sitting now.”
What is certain is that Mr Gross’s move has been good for Janus. The fund company founded in 1969 recorded its first inflows in five years in the final quarter of 2014, thanks to the arrival of Mr Gross.
Clients added a net $2bn to Janus funds in the three months to December, although more than $700m of that came from Mr Gross personally to bulk up his new bond fund. Its share price has also jumped roughly 65 per cent since his arrival on September 26.
I ask Mr Gross how it feels to become something of a rainmaker again. He does not get to answer. “While I certainly do not disagree that Bill is a rainmaker, I just want to make sure that we keep the focus of this conversation on what we agreed: investments,” the PR executive reminds me.