Bill H. Gross
William Hunt Gross
April 13, 1944
Middletown, Ohio, U.S.
|Residence||Laguna Beach, California, U.S.|
|Alma mater||Duke University|
University of California, Los Angeles
|Occupation||Investor, fund manager, and philanthropist|
|Known for||Founding of PIMCO|
Managing the PIMCO Total Return Fund
|Net worth||US$1.5 billion (October 2018)|
|Spouse(s)||Sue Gross, Pam 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.(subscription required) Part of his family is originally from Winnipeg, Canada. He was raised a Presbyterian. He moved with his parents to San Francisco in 1954. Gross graduated from Duke University in 1966 as an Angier B. Duke Scholar, and with a degree in psychology. At Duke, he joined Phi Kappa Psi. 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. 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.
Nicknamed the “Bond King”, Gross managed one of the world's largest mutual funds, focusing mostly on bonds and fixed income investments. Called "the nation's most prominent bond investor" by The New York Times, he co-founded Pacific Investment Management (PIMCO) and managed PIMCO's Total Return fund (once the world's largest bond fund with almost $293 billion in assets) and several smaller ones until his departure in September 2014.
At Pimco, Gross controlled more bond money than anyone in the world, and he advised the Treasury on the role of subprime mortgage bonds during the 2008 financial crisis. In naming Gross the Fund Manager of the Decade for fixed income in 2010, Morningstar said: “No other fund manager made more money for people than Bill Gross.” Gross was known for his ability to identify and exploit inefficiencies in markets, and for adjusting his strategies as Pimco grew, from embracing new technologies, to derivatives and the internet. Ben Trosky, who created and ran Pimco's high-yield bond business from the 1990s through the early 2000s, told Barron's that Gross was, “a good trader, a good analyst, and a good salesman, able to distill complex ideas into something simple and accessible.”
Gross was able to beat the market for much of his career by exploiting the element of certainty, and mastering the element of uncertainly, according to a 2002 Fortune story, "The Bond King". Certainty for a bond investor like Gross included variables, such as credit ratings, yields, maturities, and duration, a measure of risk. The longer a bond's duration, the more wildly its price fluctuates when rates change, with cautious investors choosing shorter-term durations to limit price volatility caused by interest rate changes. Gross took advantage of uncertainty by making educated – but accurate – guesses on the direction of interest rates, inflation and other variables that affect bonds.
The Financial Times wrote in March 2019: “Active, aggressive bond investing was Gross’ big innovation. Historically, insurers and pension funds were the big buyers of bonds. They rarely traded — in fact bonds were typically kept in a vault, and selling meant physically mailing them to the buyer — and enjoyed cordial, clubby relationships with Wall Street. Pimco, on the other hand, actively traded in and out of positions, expanded assertively into hot new areas like junk bonds and emerging markets, and used its increasing clout to cudgel banks into giving them better bids.”
Following the collapse of Wall Street in 2008, Gross emerged as one of the nation’s most influential financiers, and became among the most fervent supporters of the Obama administration’s strategy (the Public-Private Investment Program, or P.P.I.P.) to enlist private investors to help bail out the nation’s ailing banks and try to revive the economy.
It was widely reported that the departure of Pimco chief executive Mohamed El-Erian was triggered by conflict with Gross. Gross himself 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”. Pimco settled with Gross in March 2017 for a reported $81 million, all of which Gross pledged to donate to charity.
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.
He announced his retirement from Janus Henderson Investors and active fund management in February 2019. He said at the time that he would focus on managing his personal assets and private charitable foundation, the $390 million-asset William, Jeff and Jennifer Gross Family Foundation.
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. In 2018, they were involved in a contentious divorce.
Gross is a prominent stamp collector. As of November 2005, he became the third person (after Robert Zoellner in the 1990s and Benjamin K. Miller pre-1925) 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. 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. 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. On October 3, 2018, Gross continued his formal exit from the market when Siegel Auction Galleries sold 106 of his pieces at the Lotte New York Palace hotel in New York City. The sale generated $10 million, breaking the $9.1 million record for a single-day stamp auction set in 2007. Continuing his tradition, Gross told Barron's that proceeds from the latest sale would go to Doctors Without Borders and the New York Times Neediest Cases, with more charities to be announced later.
Gross is well known as a passionate amateur golfer. In the forward to former journalist David Rynecki's 2007 book, “Deals on the Green,” Gross wrote golf was, “the most frustrating, damnable game ever conceived – alternately elevating and depressing you within the span of mere minutes. I love golf. No, I hate it.” He has played in a foursome with Tiger Woods and other professionals at the AT&T Pro-Am at Pebble Beach, but wrote that even playing with Woods and earning tournament trophies, “can’t compare to the exhilaration of the moment, the thrill of victory, and yes, the agony of missing a three-footer.”
Wealth and philanthropy
In 2005, Gross donated $23.5 million to Duke University, $20 million of which was set aside for financial aid. In 2006, Gross donated to Doctors Without Borders/Médecins Sans Frontières the $9.1m that he earned from the auction at Shreves Philatelic Galleries of his British philatelic collections. 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. 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.
In 2012, Gross and his wife, Sue, donated $20 million to Cedars-Sinai Medical Center (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.
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.
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. Gross donated $8 million in 2009 to the National Postal Museum to create a 12,000-square-foot gallery. Portions of the donation came from the proceeds of Gross's sale of his collections of civil war and British North America postal history.
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.
- "Forbes profile: Bill Gross". Forbes. Retrieved 4 October 2018.
- "'Bond King' Bill Gross leaves Pimco, joins Janus". Daily Republic. 2014-09-26. Retrieved 2019-05-15.
- "Miss Roberts Becomes Bride". The New York Times. 1968-12-22. Retrieved 2010-09-04.
- Brewster, Deborah (2008-09-12). "Man in the News: Bill Gross". Financial Times. Archived from the original on 2011-07-11. Retrieved 2010-09-04.
- Joanna Slater (2012-08-23). "The obsessive life of bond guru Bill Gross - The Globe and Mail". M.theglobeandmail.com. Retrieved 2013-11-01.
- Gross, William H. (1998). Bill Gross on Investing. John Wiley and Sons. p. 79. ISBN 0-471-28325-8.
- CNN Library (March 7, 2014). "Bill Gross Fast Facts". CNN.
- Grand Catalogue of the Phi Kappa Psi Fraternity - Twelfth Edition, p. 132: Bernard C. Harris Publishing Company, 1985.
- Bongioanni, Carlos (July 23, 2015). "How time in Navy, Vietnam shaped a budding billionaire's life". Stars and Stripes.
- Loth, Richard. "The Greatest Investors: William H. Gross". Investopedia. Retrieved 2013-11-01.
- "MUTUAL FUNDS REPORT; A Quarter Of Gains, But Doubt Persists". New York Times. 2001-07-08. Retrieved 2013-11-01.
- Sommer, Jeff (2019-02-04). "Once the 'Bond King,' Bill Gross Is Retiring, His Star Dimmed". The New York Times. ISSN 0362-4331. Retrieved 2019-06-05.
- "Global". Pimco.Com. Retrieved 2013-11-01.
- Karen Dolan, C. F. A. (2010-01-12). "Announcing the Morningstar Fund Managers of the Decade". Morningstar.com. Retrieved 2019-06-05.
- Childs, Mary. "Bill Gross Made the Bond Market What It Is Today". www.barrons.com. Retrieved 2019-06-05.
- "The Bond King (Fortune, 2002)". Fortune. Retrieved 2019-06-13.
- Wigglesworth, Robin (March 9, 2019). "Bill Gross: 'We were looking for every penny we could get'". Retrieved June 5, 2019.
- Leonard, Devin (2009-06-20). "Bill Gross of Pimco Is on Treasury's Speed Dial". The New York Times. ISSN 0362-4331. Retrieved 2019-06-05.
- Walton, Justin (11 March 2016). "Mohamed El-Erian Vs. Bill Gross: The Two Bond Kings (C, JNS)". Investopedia. Retrieved 24 June 2018.
- Zuckerman, Gregory; Grind, Kirsten (24 February 2014). "Inside the Showdown Atop Pimco, the World's Biggest Bond Firm". The Wall Street Journal. Retrieved 24 June 2018.
- Ablan, Jennifer (6 March 2014). "Exclusive: Pimco's Gross declares El-Erian is 'trying to undermine me'". Reuters. Retrieved 24 June 2018.
- Childs, Mary (8 October 2015). "Gross to Sue Pimco for 'Hundreds of Millions' Over Ouster". Bloomberg News. Retrieved 24 June 2018.
- Thomas, Lauren (2017-03-27). "Bill Gross settles lawsuit against Pimco for $81 million and a nameplate: Sources". CNBC. Retrieved 2019-06-05.
- Quinn, James (11 September 2008). "Fannie Mae And Freddie Mac Rescue Nets $1.7bn for Bill Gross". The Daily Telegraph. London.
- "Janus Henderson Announces the Retirement of William H. Gross". www.businesswire.com. 2019-02-04. Retrieved 2019-06-05.
- "Bill Gross Fast Facts". CNN.com. Retrieved 2013-11-01.
- English, Carleton (2018-06-18). "Bill Gross got revenge on ex-wife with fart spray: court papers". New York Post. Retrieved 2019-06-12.
- Frank, Robert (2007-04-25). "The Billionaire Stamp Collector - The Wealth Report - WSJ". Blogs.wsj.com. Retrieved 2013-11-01.
- "General Research Division | The New York Public Library". Nypl.org. Retrieved 2013-11-01.
- "Lessons Learned, Investor Builds Portfolio of Stamps". Washingtonpost.com. 2006-05-26. Retrieved 2013-11-01.
- "Bond Guru Bill Gross is about to rattle another market: stamp collecting". Bloomberg. March 7, 2019. Retrieved August 22, 2018.
- "Auction Preview Catalogue" (PDF). Robert A. Siegel Auction Galleries. Retrieved August 22, 2018.
- Childs, Mary. "Bond King Bill Gross Is Also the King of Stamps. Now He's Getting Out". Retrieved 2018-10-19.
- "An 18-Hole Character Test". 2007-05-28. Retrieved 2019-06-13.
- Rynecki, David (2007-04-19). Deals on the Green: Lessons on Business and Golf from America's Top Executives. Penguin. ISBN 9781440621932.
- Goodkind, Nicole. "Could this be the key to success on Wall Street? Hedge fund billionaire Ray Dalio thinks so". Retrieved 15 May 2014.
The technique ... is popular with folks like Bridgewater's Ray Dalio (who offers TM to his 400 employees), Bill Gross, Dan Loeb, Nigol Koulajian (Quest Partners) and Kevin Kimberlin (Spencer Trask & Co).
- Shatzker, Eric (2019-02-28). "The Bill Gross You Didn't Know: Taxes, Deficits and Asperger's". Bloomberg News. Bloomberg L.P. Retrieved 2019-03-04.
And the billionaire and registered Republican agrees with Democratic Rep. Alexandria Ocasio-Cortez that the rich should pay more in taxes -- if not quite the 70 percent she’s proposing at the margin.
- "William Gross Political Campaign Contributions 2008 Election Cycle". campaignmoney.com.
- Shatzker, Eric (2019-02-28). "The Bill Gross You Didn't Know: Taxes, Deficits and Asperger's". Bloomberg News. Bloomberg L.P. Retrieved 2019-03-04.
- "The 1889 Eden Musee Exhibition" in The Siegel Despatch, No. 60 (Fall 2018), p. 7.
- United States Stamp Treasures: The William H. Gross Collection. Robert A. Siegel Auction Galleries, New York, 2018. pp. 196-201. Archived here.
- "Sue and Bill Gross Give $23.5 Million to Duke, Primarily for Financial Aid | Duke Today". Today.duke.edu. 2005-01-19. Retrieved 2013-11-01.
- Peter Aspden (September 25, 2007). "Magna Carta to be auctioned in New York". Financial Times.
- Results of the auction, William H. Gross Collection auction official website ; retrieved 7 August 2009.
- Main items described in Julia Lee, "Scandinavia gems to be sold for charity", Stamp Magazine, 74-6, June 2008, page 8 and in "Bill Gross Collection of Classic Scandinavian in charity auction", Gibbons Stamp Monthly, June 2008, page 18.
- "UCI nursing will benefit from record $40 million gift". Ocregister.com. Retrieved 2017-02-23.
- Kozlowski, Rob (2012-11-26). "Cedars-Sinai to name center after Bill and Sue Gross". Pensions and Investments.
- "Mercy Ships Receives $20 Million Gift from PIMCO Founder, Bill Gross and wife Sue Gross". Mercy Ships. Archived from the original on 23 October 2013. Retrieved 21 October 2013.
- "Sue and Bill Gross commit $40 million to establish nursing school". News.uci.edu. 2016-01-12. Retrieved 2017-02-23.
- "Smithsonian National Stamp Museum: William H. Gross Stamp Gallery". postalmuseum.si.edu.
- "SMITHSONIAN'S NATIONAL POSTAL MUSEUM RECEIVES ITS LARGEST DONATION FROM PIMCO'S FOUNDER BILL GROSS". September 22, 2009. Retrieved August 22, 2018.
- "WILLIAM H. GROSS AUCTIONS COLLECTIONS TO BENEFIT THE NATIONAL POSTAL MUSEUM". Smithsonian National Postal Museum. November 23, 2009.