Janus Capital Surges On Bond King's First Day

Shares of Janus Capital Group (NYSE:JNS) – the fund management company with $178 billion of assets under management jumped a massive 43.02% on Friday. The significant surge in the price followed the hiring of Bill Gross – co-founder of the large investment firm – Pacific Investment Management Co. (Pimco). Gross used to run Total Return Fund worth $222 billion.

Gross joined Janus Capital for his long-standing relationship and due respect for CEO Weil. He is expected to handle client asset management.

Historically, Janus Capital has been involved in stock investing, which touched new highs during the internet bubble in 2000. However, following the bursting of the internet bubble, shares of Janus Capital plunged with its assets under management descending by more than half over the next several years. Further, in late 2003, the company became involved in a major mutual-fund scandal, which was settled in early 2004.

Since Mr. Weil – Chief Executive Officer of Janus Capital – joined in 2010 he used diversification strategies beyond equities and tripled the fund’s fixed-income assets from $10.3 billion to $31 billion.

Therefore, Gross who is being crowned as the “bond king” for taking Pimco to a new high in the asset management industry, which pulled hundreds of billions of dollars from investors, is expected to propel Janus Capital to new heights. The bond king helped turn California-based Pimco into one of the world's largest bond managers.

However, of late Pimco has been burdened with problems and recorded persistent outflows of investors following its consistent poor performance. Therefore, despite possessing 43 years of concrete experience at Pimco over record fixed income strategies, Mr. Gross resigned and decided to join Janus Capital.

As his first move in Janus Capital, Gross will manage the recently launched Janus Global Unconstrained Bond Fund. Moreover, he will initiate a new global macro fixed-income division next week.

With his mastery at asset management strategies, Bill Gross is expected to take Janus Capital to a new high, which has been recording outflows every quarter. Notably, for the second quarter of 2014, Janus Capital recorded long-term net outflows of $3.3 billion. Though weakness in flows remains a matter of concern, the company has the best-in-class investment boutique with potential for AUM and revenue along with competitive leverage growth.

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