Bill H. Gross

William Hunt Gross (born April 13, 1944) is an American investor, fund manager, and philanthropist. He co-founded Pacific Investment Management Co, the largest global fixed income investment company, and ran their $270 billion Total Return Fund (PTTRX), before leaving to join Janus Capital Group (now Janus Henderson) in September 2014.

Early life and education

Gross was born in Middletown, Ohio, the son of Shirley (née Tait), a homemaker, and Sewell Mark Gross, a sales executive for AK Steel Holding.^[2](subscription required)^[3] Part of his family is originally from Winnipeg, Canada.^[4] He was raised a Presbyterian.^[5] He moved with his parents to San Francisco in 1954.^[3] Gross graduated from Duke University in 1966 as an Angier B. Duke Scholar, and with a degree in psychology.^[6] At Duke, he joined Phi Kappa Psi.^[7] He then served in the Navy from 1966 to 1969 as an assistant chief engineer aboard the USS Diachenko, leading several sorties of SEALS to landing sites along the coast of Vietnam.^[8] He retired from the Navy in 1970 with the Tet combat and Vietnam active service ribbons. Gross earned an MBA from the UCLA Anderson School of Management in 1971. Gross briefly played blackjack professionally in Las Vegas, Nevada, and has said that he applies many of his gambling methods for spreading risk and calculating odds to his investment decisions.

Investment career

Gross is a CFA Charterholder, who earned his credentials while working as an investment analyst for Pacific Mutual Life between 1971 and 1976.^[9]

Gross managed one of the world's largest mutual funds, focusing mostly on bonds. Called "the nation's most prominent bond investor" by The New York Times,^[10] he co-founded Pacific Investment Management (PIMCO) and managed PIMCO's Total Return fund (the world's largest bond fund) and several smaller ones until his departure in September 2014.^[11]

It was widely reported that the departure of Pimco chief executive Mohamed El-Erian was triggered by conflict with Gross.^[12][13] Shortly after El-Erian's departure, Gross told Reuters that he had “evidence” that El-Erian “wrote” a feature story in the Wall Street Journal on the conflict in an effort to undermine him.^[14] Pimco issued a statement to Reuters via email, denying the statements attributed to Gross.^[14]

After El-Erian left, it was reported that Gross came under fire from the senior managers that had been put in place after El-Erian's departure, extending to consideration of firing Gross.^[12] Gross left late in the fall of 2014, and in October of 2015 sued Pimco and parent company Allianz for “hundreds of millions of dollars,” claiming that he had been pushed out by “cabal” of executives “Driven by a lust for power, greed, and a desire to improve their own financial position and reputation at the expense of investors and decency,“ calling them out for “improper, dishonest, and unethical behavior”.^[15]

In the 1990s he authored two popular-market books on investing, Bill Gross on Investing and Everything You've Heard About Investing is Wrong! In September 2008, by holding large positions in agency-backed mortgage bonds of Fannie Mae and Freddie Mac, Gross's funds netted U.S. $1.7 billion after the federal takeover of Fannie Mae and Freddie Mac.^[16]

Personal life

Gross has been married twice. In 1968, he married Pamela Roberts. They had two children: Jeff and Jennifer. They later divorced. In 1985, he married Sue J. Frank; they have one son Nick.^[17] In 2018, they were involved in a contentious divorce, with his wife claiming in court papers that Gross sprayed "fart spray" in their Malibu house and left dead fish in the air-conditioning ducts to make the house stink before turning it over to her. He in turn claims that his wife "stole" a $36.9 million Pablo Picasso painting, replacing it with a replica. Gross also claims that his wife is violent.^[18]

Gross is a prominent stamp collector.^[19] As of November 2005, he became the third person (after Robert Zoellner in the 1990s and Benjamin K. Miller pre-1925)^[20] to form a complete collection of 19th century United States postage stamps. In October 2005, he purchased at auction for $2.97 million a unique plate block of the famous 1918 24-cent U.S. airmail stamps known as the "Inverted Jenny," featuring an engraving of a Curtiss JN-4 biplane printed upside-down. He then traded the Inverted Jenny plate block to Donald Sundman, President of Mystic Stamp Company, a stamp dealer, for a 1-cent 1868 "Z Grill" depicting Benjamin Franklin (one of only two known to exist), thus completing Gross's 19th century collection.^[21]His collection will be auctioned over the next two to three years with the proceeds to be donated to charity. Prior auctions of Gross’s Great Britain, British Commonwealth, Western Europe, Scandinavia, Confederate States, Switzerland and Hawaii stamp collections have generated more than $26 million in proceeds..^[22] What remains of Gross’s collection — the United States stamps and covers – were scheduled to begin being auctioned with the sale of United States Stamp Treasures on October 3, 2018.^[23]

In 2014 Gross was reported as one of a number of "prominent investors [who] have taken to Transcendental Meditation".^[24]

Wealth and philanthropy

In 2005, Gross donated $23.5 million to Duke University, $20 million of which was set aside for financial aid.^[25] In 2006, Gross donated to Doctors Without Borders/Médecins Sans Frontières the $9.1m^[26] that he earned from the auction at Shreves Philatelic Galleries of his British philatelic collections.^[27] Over the years, Gross has become the largest donor in history to Doctors Without Borders at approximately $25m. His Scandinavian and Finnish collections were sold by Spink auction house in May 2008 to make a donation to Jeffrey Sachs Millennium Villages Project at Columbia University.^[28] Gross and his wife also donated $20 million to Hoag Memorial Hospital Presbyterian for women's health and $10 million to the University of California, Irvine to found a stem cell research center at its school of medicine.^[29]

In 2012, Gross and his wife, Sue, donated $20 million to Cedars-Sinai (Los Angeles) for the new Sue and Bill Gross Surgery and Procedure Center. The center will take up the fifth floor of the Pavilion, which is scheduled to open in summer 2013.^[30]

In 2013, Gross and his wife donated $20 million to Mercy Ships. This will be designated to build toward a new hospital ship, currently in the design phase, to join the current hospital ship, the Africa Mercy, in delivering medical services to the poor. In honor of this donation, the hospital on board the new ship will be named the Sue and Bill Gross Healing Hospital.^[31]

In 2016, Gross and his wife donated $40 million to the University of California, Irvine to establish a nursing school.^[32][29]

Named after its primary benefactor, the Smithsonian National Postal Museum’s William H. Gross Stamp Gallery is the world’s largest gallery dedicated to philately.^[33] Gross donated $8 million in 2009 to the National Postal Museum to create a 12,000-square-foot gallery.^[34] Portions of the donation came from the proceeds of Gross’s sale of his collections of civil war and British North America postal history.^[35]

Publications and works

• Bill Gross (1997). Everything You've Heard About Investing Is Wrong!. Crown Business. ISBN 0-8129-2839-3.
• Bill Gross (1998). Bill Gross on Investing. Wiley. ISBN 0-471-28325-8.

References

External links

• Speech inducting Bill Gross into the Fixed Income Analysts Society Hall of Fame
• New York Times article on Gross's stamp collecting
• The Bill Gross' Way of Making Money (Market Thoughts)
• The William Gross Stamp Collection
• American journalist Consuelo Mack interviews Bill Gross of PIMCO