Pimco's Gross keeps on digging over El-Erian's departure

The head of Pimco has accused his former heir apparent of trying to 'undermine' him.

by Rachel Savage
Last Updated: 09 Oct 2015

The departure of Mohamed El-Erian as chief exec of Pimco, the world’s biggest bond firm, is rapidly descending into farce. First, the Wall Street Journal reported that the investment giant’s co-founder Bill Gross had a sweary public argument with his former heir apparent, and now Gross has accused El-Erian of writing the WSJ’s article himself.

‘I’m so sick of Mohamed trying to undermine me,’ Gross said to Reuters, claiming he had ‘evidence’ that El-Erian ‘wrote’ the WSJ article.

When the Reuters reporter asked if she could see the ‘evidence’ Gross responded, ‘You're on his side. Great, he's got you, too, wrapped around his charming right finger.’ The charming Mr Gross, who was overseeing more than $1.9tn (£1.1tn) in assets at the end of last year, also indicated that he had monitored the former chief exec’s phone calls.

Pimco’s press team went into firefighting overdrive, stating in an email, ‘Mr. Gross did not make the statements Reuters attributes to him. He categorically denies saying this firm ever listened in on Mr. El-Erian's phone calls or that Mr. El-Erian 'wrote' any previous media article.’

The WSJ reported last month that Gross and El-Erian had argued in front of more than 12 colleagues. ‘I have a 41-year track record of investing excellence… What do you have?’ Gross demanded of El-Erian, sounding more than a little like a stroppy teen.

‘I'm tired of cleaning up your s***,’ witnesses reported El-Erian saying in response. (The WSJ’s publisher Dow Jones unsurprisingly said Gross’ claim that El-Erian wrote up his own delightfully colourful language was ‘astoundingly incorrect’.)

El-Erian has stayed mum about all the mud slinging, perhaps due to having apparently signed a non-disclosure agreement about his departure. However, keeping quiet now means the investor looks rather sensible and grown-up compared to his less circumspect former boss.

With investors fleeing bonds, and thus Pimco, as the Fed continues to taper its purchases of US treasuries, Gross may want to consider reading MT columist Alexander Garrett’s advice on how to leave a legacy

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