Bill Gross, who has been running the $1.5 billion Janus Global Unconstrained Bond Fund since leaving Pacific Investment Management Co. last year, is getting a co-manager.
Janus Capital Group Inc. on Wednesday said that Kumar Palghat, who worked with Gross at Pacific Investment Management Co. for 10 years, will help run the fund, with Gross staying on as lead manager. Janus also bought a majority stake in Palghat’s firm, Kapstream Capital Pty Ltd, a global unconstrained fixed income manager with $6.6 billion in assets.
Janus is beefing up its macro fixed-income business and adding managers to support Gross, 71, who has struggled to attract new money amid a challenging market. His fund declined 0.1% this year, trailing 77% of rivals, according to data from Chicago-based Morningstar Inc. In a March interview with Bloomberg Television, Gross said he’ll keep trading for the next two to four years to prove he can still beat the market.
“Bringing in people who can support Gross makes a lot of sense,” said Russel Kinnel, director of fund research at Morningstar. “Bill Gross with a small team makes more sense than Bill Gross with no team. At PIMCO he had any army of traders and analysts helping him.”
Janus, which is based in Denver, will make an initial upfront cash payment of about $85 million for Kapstream, which was founded by Palghat and Nick Maroutsos. It has the option to purchase the remaining 49% stake in the future.
Founded in 2006, the Sidney-based firm has clients in Australia and the U.S., and three investment principals, Palghat, Maroutsos and Steve Goldman. Palghat will remain manager of the Kapstream Absolute Return Income Fund, which is only available to investors in Australia.