Out on his own, Gundlach falls short of his projections
Ousted last December after 24 years at TCW Group, star bond fund manager Jeffrey Gundlach wasted little time setting up a rival money management firm with most of his former TCW teammates.
But his DoubleLine Capital has fallen short of attracting the assets that Gundlach predicted, despite the strong performance of his new flagship mutual fund.
Gundlach had overseen about $70billion in bonds at TCW. Soon after TCW fired him, shocked investors quickly pulled about $25 billion from the company.
But relatively little of that money has followed Gundlach to DoubleLine. The firm says it now has about $3.7 billion under management, including almost $1.5billion in the DoubleLine Total Return Bond mutual fund, which primarily invests in mortgage-backed securities — the specialty that earned Gundlach fame and a huge income at TCW.
In December, Gundlach said he expected DoubleLine to have $10 billion in assets in a “short while.”
He also said he thought he could have $50 billion under management by the end of 2010.
Through a spokesman, he declined to comment for this story.
Some investors say the legal war between Gundlach and TCW has kept them from investing with DoubleLine for fear that the firm ultimately could be hurt if TCW prevails. TCW has sued Gundlach, accusing him of stealing proprietary information from TCW to set up his new firm.
Andrew Douglas, investment chief for Dubuque Bank & Trust in Iowa, said that after Gundlach was dumped the bank pulled about half of its money from the TCW Total Return Bond fund, which Gundlach had managed.
But Douglas said he hasn’t shifted money to DoubleLine.
TCW’s lawsuit “gives you a little bit of a pause,” he said.
Still, the DoubleLine Total Return fund has been the fastest-growing new mutual fund this year, according to Morningstar Inc.
The fund also has sharply outperformed the TCW Total Return Bond fund: Since the DoubleLine fund was launched April 6, its total return (principal gain plus interest earnings) is 9.1%, compared with 5.1% for the TCW fund in the same period.
