William Hunt Gross, better known as Bill Gross, is co-founder and previous co-chief investment officer of Pacific Investment Management Company LLC (PIMCO), one of the largest investment firms in the world. The famous money manager left PIMCO in 2014 with a net worth of $1.95 billion, and has since grown his assets even more. He became rich by legendary hard work and shrewd investing in bonds.

The 1970s

Bill Gross got his psychology degree from Duke University and an MBA from UCLA, and became a chartered financial analyst (CFA) while working as an investment analyst for Pacific Mutual Life between 1971 and 1976. Pacific Mutual is one of the world’s largest mutual funds, and Gross focused mostly on bonds. He also worked at Allianz Global Investors of America. In 1971, Gross co-founded PIMCO and became its chief investment officer, managing director and portfolio manager, before leaving in September 2014. By 2017, the multinational firm, headquartered in Newport Beach, California, employed about 2,200 employees in 12 offices worldwide. Prominent leaders included former Federal Reserve Chairman Alan Greenspan, as well as former Federal Reserve Chairman Dr. Ben Bernanke, who took over as senior advisor in 2015.

The 1980s

Over the 1980s and through the next two decades, Gross launched a reputation as a significant bond investor, to the extent that peers dubbed him "Bond King." In 1987, Gross set up and managed PIMCO's $270 billion Total Return Fund ("PTTRX"), which became the world’s largest bond fund, due largely to its focus on maximizing total return while protecting principal. Over 37 years of association with PIMCO, Gross managed more than $800 billion of securities.

The 1990s

Over the years, Gross gave interviews and speeches, and authored popular articles on bond investing. In the 1990s, he published two books on investing that became instant best-sellers. "Bill Gross on Investing" and "Everything You've Heard About Investing Is Wrong!" came out in 1997 and quickly spun through various editions. Biographies about the famous money manager included Timothy Middleton's "The Bond King: Investment Secrets From PIMCO's Bill Gross."

The 2000s

In 2008, Gross bought large stakes in agency-backed mortgage bonds of Fannie Mae and Freddie Mac, lobbied for federal takeover of these companies and won $1.7 billion when his efforts succeeded. In September 2014, Gross was fired from PIMCO due to a series of unfortunate events that included an SEC investigation into a PIMCO ETF, criticisms over his management style and market views, and problems with his Total Return Fund. Gross received a $290 million bonus upon his departure. In that same year, he became lead portfolio manager at Janus Capital Group Inc. and Janus Capital Management LLC, managing their $1.9 billion in assets. The same year Gross sued PIMCO over his ouster, and later settled for $81 million, getting a Founders Room named after him at the Newport Beach headquarters and the launch of a "Bill Gross Award." In a joint statement the parties announced all the proceeds from the settlement would go to the Sue and Bill Gross Foundation.

The Bottom Line

Bill Gross himself attributes his success to some eccentric habits. Blinds were drawn during daily meetings that Gross had with top executives so that participants could concentrate only on PIMCO. For the same reason, Gross encouraged his traders to use electronic equipment rather than talking on PIMCO's trading floor. He told the New York Times in 2009 that he stood on his head during yoga practice to help him think better. He also used his experience as a blackjack player in Las Vegas to analyze investment odds and to better his investment risks.

The man’s habits and expertise helped make him Morningstar's Fixed Income Manager of the Year for 1998, 2000 and 2007. Gross was the first person to receive the award more than once. A 1993 article in Pensions & Investments magazine rated Gross the foremost expert on bonds in the United States. Three years later, he became the first portfolio manager inducted into the Fixed Income Analysts Society's hall of fame for his contributions to portfolio management and fixed-income analysis. In 2000, Gross received the Bond Market Association’s Distinguished Service Award. As of March, 2017 Bill Gross is worth $2.5 billion.

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