There are three big names in bonds these days, and they're all in Southern California. Together, Bill Gross and Mohamed El-Erian run Newport Beach-based PIMCO, the world's largest bond fund, overseeing a jaw-dropping $1.8 trillion in assets. Meanwhile, former '80s rocker Jeff Gundlach has been coming on strong in the past year.
His L.A. firm, DoubleLine Captial, has grown significantly, with now more than $40 billion under management. Gundlach's old firm, TCW (which he left in a cloud of controversy in 2009), is also in the news: It's being bought by the Carlyle Group, one of the world's biggest private equity firms.
PIMCO is in the midst of much speculation about whether El-Erian will be able to run the find as effectively as Gross once Gross decides to call it quits. This has created plenty of opportunity for Gundlach, who was already well known for his ability to make piles of money, to position DoubleLine as a better, faster PIMCO and a smarter, punkier TCW. Back in May, Businessweek's Roben Farzad captured the meteoric ascent of DoubleLine, which has gone from zero to $40-ish billion since 2010, and Gundlach, the new "bond king."
Hollywood and fixed income: An unlikely pairing, but there it is. Bonds investors — particularly PIMCO, DoubleLine, and TCW, a powerful SoCal trio — have been kind of rock 'n roll for the past few years, racking up big returns in an economic environment when returns have been hard to find.
CBNC just ran a two-part interview with Gundlach (see below), with the obvious inciting event being the Federal Reserve's decision to fire up an open-ended round of quantitative easing, concentrating on mortgage-backed securities, a sweet-spot for Gundlach. The man was impressive — all the more so given that last week, he had $10 million in blue-chip modern art (Jasper John, Philip Guston, Frank Stella) stolen from his house in Santa Monica, along with $100,000 in collectible wine...and his Porsche!
Gundlach has offered a $200,000 reward. But even the biggest burglary Santa Monica's police department has ever seen doesn't seem to have taken Gundlach's eye off the bond ball.