The billionaire hedge fund investor George Soros has withdrawn US$490 million from a new investment fund set up by William Gross, according to investment filings.
Soros was an early investor with Gross when he moved to the fund company Janus Capital Group, after being forced to leave Pacific Investment Management Co (PIMCO) late last year. The investment gave the man known as the bond king a welcome boost as he started anew after 40 years at PIMCO.
Like many large institutional investors, the funds connected to Soros did not invest in Gross’ main mutual fund, the Global Unconstrained Fund, which is aimed at smaller retail investors.
Instead, his money was managed in a so-called separate account. As of the second quarter of this year, Soros had US$490 million invested with Gross, according to eVestment, a research firm that tracks investor flows and performance.
However, in a filing for the quarter that ended in September, that money had been withdrawn from Janus, bringing the total amount managed in these accounts to US$1.6 billion, down from US$2.1 billion.
A representative from Janus declined to comment. A representative for Soros did not respond to a request for comment. The withdrawal was reported earlier by Pensions & Investments.
On the face of it, the withdrawal of one investor, even one of that size, should not in any way spell disaster. However, for Janus, which bet big that Gross would bring in a wave of new money, the exit of Soros carries more weight, especially in light of the fairly small amount of money that Gross is overseeing.
Over the past year, Gross has struggled to replicate the stellar returns that he produced at PIMCO while managing the Total Return Fund.
For the year to date, his fund is down 1.4 percent, a record that trails the main benchmark index, which is up 1.1 percent, according to the fund tracker Morningstar.
The fund is also lagging its peers, with 74 percent of similarly themed funds having a better record than Gross’ this year.
The mutual fund’s current size is US$1.4 billion, and its fairly small size reflects the difficulties Gross has had in attracting investors to his new enterprise.
By comparison, the Total Return Fund, which under Gross became the largest mutual fund in the world, has delivered better results.
So far this year, the fund is up 1 percent, beating 70 percent of its peers.
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