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Jeff Gundlach Starts Own Firm With Oaktree Money, TCW Most Likely Furious
The big guns in LA are out swinging, with news emerging that Jeff Gundlach will get funding and a minority investment from of bond giant and other major TCW defector, Oaktree. Howard Marks' firm is now set to eat TCW's municipal lunch. And all the disciples of Robert Day had to do was promote the guy. Also, futures in the "Battle of the Attanasios"(Paul and Mark) just surged majorly in favor of the House creator. A good overview of Oaktree can be found here, courtesy of information disclosed in their recent $250 million bond offering.
From Bloomberg:
Jeffrey Gundlach, the top-performing bond manager and chief investment officer who was fired by TCW Group Inc., started his own asset-management firm with financial and operational support from Oaktree Capital Management LP.
Oaktree, which was started by former TCW executive Howard Marks, will get a minority stake in Gundlach’s firm, DoubleLine LLC, the Los Angeles-based company said today in a statement.
DoubleLine, which has recruited more than 30 professionals from TCW since Gundlach left Dec. 4, didn’t disclose terms of its agreement with Oaktree.
TCW dismissed Gundlach, 50, after saying he threatened to quit and take some key professionals with him. Gundlach disputed that assertion. He oversaw $65 billion, or 59 percent of TCW’s assets, and specialized in mortgage-backed securities. TCW’s biggest mutual fund, the Total Return Bond Fund, has had $3.5 billion in investor withdrawals since Gundlach’s departure, the firm said on Friday.
“Gundlach is a very highly respected portfolio manager,”
Laurie Goodman, a mortgage-bond analyst in New York at Amherst Securities Group LP, said in an interview today with Bloomberg Radio. “We were all expecting him to resurface in fairly short order, and it’s nice to see he has done so.”
Marks and six other executives left Los Angeles-based TCW in 1995 to form their own firm in a move that TCW founder Ronald Day at the time called “disloyal at the very least.” Oaktree manages about $67.4 billion in investments including distressed debt, high-yield and convertible bonds, private equity and real estate.
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Gundlach was fired for pointing out that Obama's Rat-on-your-neighbor for free hosuing program wasn't going to work , correct?
Does TCW stand for 'Total Complete Washout' ?
-MB
my law office will call your law office, and we can do a zillion conference calls. call me crazy, but it'll be amazing if there's not a garden leave or non-compete buried into the top managers' contract.
Speaks volumes about keeping your people happy and engaged.
The guys running Gundlach's old funds are not mortgage traders and people would be wise to exit the funds. Nobody in a sane mind would stick with TCW over Gundlach
Done. Sold all shares a week ago. Follow the manager, not the fund.
Here's how it's done (they're all the same now). Login. Click on the Trade tab. Click on the Mutual Funds tab. Choose from the funds you own. Look for TGLMX or TGMNX. Select SELL. Be sure to log out. There, that was easy.
Right, jerk investors should follow the manager, no matter how big a jerk he is...
I wonder what he is going to invest in? No one else seems to be finding any MBS worth buying.
MBS Investor Withdraws Plans for IPOBy National Mortgage News Online
December 14, 2009
MBS investor Ellington Financial has pulled its planned initial public offering due to a lack of investor interest, according to combined news reports.
Ellington Financial, a company managed and advised by former Kidder Peabody head MBS trader and market veteran Michael Vranos' Ellington Management Group, had previously filed a preliminary prospectus for an initial public offering.
In other mortgage-related capital markets news, the shares of PennyMac Mortgage Investment Trust continue to be thinly traded. A vulture fund founded by former Countrywide president Stan Kurland to invest in delinquent and underperforming mortgages, the company went public this summer.
As of late Monday morning just 10,000 shares had changed hands. Since the IPO, its shares have traded between $16.70 and $20. Mortgage investors have said recently that the market still appears to be largely cautious when it comes to distressed mortgage product from recent years. "No one wants to be first to catch a falling knife,"
DebtMarket president Michael Sheridan told National Mortgage News. His fledgling company is starting to trade nonmortgage assets and he believes this will eventually be followed by in mortgage asset trade, but it remains uncertain as to when.