Bond King musical chairs: Gundlach replaces Gross on Barron's Roundtable

By Jennifer Ablan

NEW YORK - In recent years, bond investor Jeffrey Gundlach has been outperforming his rival Bill Gross. He has even been dubbed the "Bond King" by the media - a title Gross has held for many years. Now, Gundlach has replaced Gross on a high-profile investor panel.

Weekly financial magazine Barron's said on Saturday that Gross decided to quit its Barron's Roundtable. Instead, Gundlach, who has often been critical of Gross's investment calls, was added to the panel - which meets at the beginning and middle of each year - and he features prominently in the magazine's Roundtable latest cover story published on Saturday.

Barron's Deputy Managing Editor Lauren Rublin told Reuters: "We invited both Bill and Jeffrey to the Roundtable. Bill decided to resign. We missed him."

She declined to comment when asked why Gross had quit and whether Gross would have been aware that Gundlach had been invited.

In its Roundtable cover story, Barron's did not address Gross's absence. It just mentioned him in reference to how his and other 2015 Roundtable members' investment recommendations performed.

E-mails and calls to Gross and a spokeswoman for Janus Capital Group, where he is a portfolio manager, were not returned. Gundlach declined to comment.

The twice-a-year discussions among the investors attending the Roundtable, are turned into a three-part series in the magazine, usually including staged pictures and front-page billing. Each investor provides their predictions for the markets and the economy, and highlights the investment ideas they think will make money.

Dow Jones says Barron's readership, which averaged 436,000 in the third quarter of last year, has an average household net worth of about $3 million. The chance to get extensive exposure to that audience means that a place on the Roundtable is coveted by some investors.

Gross, 71, joined Janus after his departure in September 2014 from Pimco, the firm he co-founded and had built into a $2 trillion powerhouse.

Barron's Roundtable veteran Scott Black of Delphi Management confirmed on Friday that Gross was not at this week's Roundtable in New York City. Black said about Gundlach: "He was very impressive and he was very knowledgeable. I thought he was very smart and well prepared."

In 2011, Barron's anointed Gundlach, 56, as the new "King of Bonds" in a cover story.

LACKLUSTER RESULTS

Gross has posted lackluster results since going to Janus.

The Janus Global Unconstrained Bond Fund, which Gross began managing in October 2014, had a negative return of 0.72 percent in 2015, trailing 41 percent of its peers, according to Morningstar.

Gross's surprising exit from Pimco came after he had learned that top executives at Pimco and Allianz SE, the German insurer that owns it, had grown tired of his leadership and were weighing a change.

Gundlach's firm, DoubleLine Capital, is thriving on the back of a number of very prescient investment calls.

Last year, Gundlach correctly predicted that oil prices would plunge, junk bonds would live up to their name and China's slowing economy would pressure emerging markets. In 2014, Gundlach correctly forecast U.S. Treasury yields would fall, not rise as many others had expected.

Back in 2014, Gross approached Gundlach and said he was about to be fired by Pimco and broached the possibility of joining forces with Gundlach.

Discussing their potential legacies, Gundlach said Gross at that meeting spun an analogy to National Basketball Association star players Kobe Bryant and the younger LeBron James. "I am Kobe. You are LeBron James," Gross told Gundlach. "I have five rings, you have two rings - probably going to five,” a reference to the number of NBA championships the two players have each won.

Those discussions didn't lead to a partnership, and Gross instead went to Janus.

(Reporting By Jennifer Ablan; Editing by Martin Howell)

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