After Bill Gross’ abrupt departure from Pimco, many investors made hasty redemptions, and took out their funds. “Hasty” might be an operative word here, because there still may be a reason to invest in Pimco, even after the departure of the legendary Bill Gross. Management of Pimco said that Bill Gross “does not define” the firm, although for a long time it was hard to think of one without the other coming to mind. With Gross going to the much smaller Janus Capital, are there still reasons to stay in Pimco?
Oliver Pursche of TheStreet.com certainly thinks so, and outlines some reasons investors don’t need to follow Bill Gross out of Pimco. First, it doesn’t seem to be a reflection on Pimco that Gross left (although there is talk that he was being pushed out, but that is another issue). Gross already has a new project at Janus, the Janus Global Unconstrained Bond Fund. Pimco, now co-managed by Dan Ivascyn and Alfred Murata, has plenty of talent besides Gross and have proven this with the firm’s top performance. Those who want to follow Bill Gross to Janus should keep in mind that Janus is tiny compared to Pimco, and may have its share of growing pains; it might be a better idea to stay at Pimco. Finally, the media drama over Gross’ departure might not reflect the reality, and when cooler heads prevail, it might not seem like such a crisis.