Top bond manager Gundlach ousted from TCW FundWatch – MarketWatch
zyakaira notes: A year end reminder of the fraility and the secrets in the financial markets, such a momentous happening may easily pass us by in the bankruptcies of California and Arizona, The Sale of emerging market stakes by BankAm, Loss of Merrill etc but is equally important. These are fundamental pillars of the fixed income markets that are probably 5-6 times the Equities markets and these are denizens as guilty as Bernie Madoff walking away with a warning
TCW, owned by SocGen of France bought Metropolitan West in a “behind the curtains” deal
Enter Metropolitan West. Buying the crosstown rival gives TCW a solid answer to institutional and retail investors who would otherwise exit along with Gundlach, Jacobson said. Met West’s flagship bond fund, the $7.4 billion Metropolitan West Total Return MWTRX 9.90, , is highly regarded and rates as one of Morningstar’s favorite bond offerings.
Los Angeles-based TCW, owned by Frances Societe Generale FR:GLE, said Chief Investment Officer Jeffrey Gundlach, one of the nations top bond-fund managers, was “relieved of his duties” as part of management changes accompanying the deal, the purchase price of which was not disclosed.Gundlach was also removed from TCWs board of directors, the firm added.”TCW deeply regrets the need to take this action,” TCW said in a statement.Erin Freeman, a spokeswoman for TCW, declined to comment on why Gundlach was ousted.Behind the scenes move Gundlachs ouster appears to be due to corporate politics rather than problems with the fund managers performance, said Eric Jacobson, director of fixed-income research at investment researcher Morningstar Inc.Jacobson said TCW has been seeking “strategic alternatives,” widely assumed to include a private-equity buyout or selling to another asset manager. Statements that Gundlach had made publicly evidently suggested that he might not be on board with such a move, and the possibility that Gundlach might leave the firm at such a critical juncture spurred TCW to act preemptively, Jacobson added.”They just decided that if they werent really careful he was going to surprise them by leaving,” Jacobson said of TCW. The departure of someone so influential and well-known among bond investors could have been catastrophic for the firm, he added.