Billionaire ‘Bond King’ Bill Gross Settles Feud With Pimco for $81 Million to Charity
Bill Gross has reached a dispute with Pacific Investment Management Co (Pimco), the firm he co-founded and built into a $2 trillion asset manager for roughly $81 million. Pimco will donate the proceeds to charity.
The legendary bond manager now runs the $1.9 billion Janus Global Unconstrained Bond Fund. He is worth $2.5 billion, according to Forbes magazine.
Under the term of agreement Pimco also agreed to dedicate a new “Founders Room” at its headquarters in honor of Gross and others who launched the firm in 1971, a nod to his role as its most famous market prognosticator and manager of the Pimco Total Return Fund, once the world’s largest mutual fund. Pimco also named him as a director emeritus of the firm’s charitable foundation.
Bill Gross and Pimco said in a joint statement the settlement was “amicable”.
Gross sued California-based Pimco, for $200 million, claiming he was pushed out of the business unfairly by executives who wanted a larger share of his bonus, which was $290 million in 2013, according to the complaint filed in Superior Court.
He also asserted in the suit that the executives wanted to offer more high-fee products to investors rather than Pimco’s traditional bond funds.
Pimco, a unit of German insurer Allianz, countered that Gross’s “egregious misconduct,” including abusive behavior toward colleagues, would have justified his firing had he not resigned.
The world’s biggest asset managers and the billionaire ‘Bond King’ terms of the accord were not disclosed, but two people familiar with the matter confirmed the terms, Reuters reports.
According to Reuters, once known on Wall Street as the “Bond King”, Gross left Pimco eight months after his second-in-command Mohamed El-Erian quit, in part because of Gross’s management style.