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Pimco's Gross talks hypnosis, Bieber and Gen. Patton at conference
June 19, 2014 / 8:52 PM / 3 years ago

Pimco's Gross talks hypnosis, Bieber and Gen. Patton at conference

CHICAGO, June 19 (Reuters) - Pimco’s Bill Gross, who runs the world’s largest bond fund, took the stage at an investment conference wearing sunglasses and seeming self-conscious about his image, lacing his speech with references to American World War Two Gen. George Patton, hypnosis and troubled pop star Justin Bieber.

Gross’ appearance at Morningstar Inc’s annual conference comes weeks after a public falling-out with former heir-apparent Mohamed El-Erian, who shared the co-chief investment officer title at Pacific Investment Management Co.

The dust-up created a wave of negative publicity around Gross and his $229 billion flagship fund Total Return. He received a warm welcome at the Chicago conference, but he said he wasn’t sure how he would be introduced.

“It could have been something about General Patton berating a wounded soldier,” Gross joked.

He then launched into a monologue about “The Manchurian Candidate”, a 1962 movie about an American soldier who is brainwashed during the Korean War and is activated back home as an assassin whose actions are triggered after seeing the queen of diamonds.

“I’ve already taken some courses in hypnotism,” Gross said, alluding that it might help him contend with the negative press around his fund’s performance and how he handled the departure of a top lieutenant.

Pimco Total Return has been hit with heavy investor withdrawals over the past 12 months, totaling nearly $59 billion, according to data from Lipper Inc, a Thomson Reuters unit.

Pimco, a unit of European financial services company Allianz SE, had $1.94 trillion in assets as of March 31, according to the firm’s website.

Analysts have said that outflows at Pimco Total Return began last year on weak performance. Even though the fund has rallied in recent weeks, its year-to-date total return of 2.66 percent still lags the benchmark Barclays U.S. Aggregate bond index’s return of 3.32 percent, according to Morningstar. Gross also is lagging 82 percent of his peers.

Despite the turmoil, Gross said, “I’ve never been happier in my work.”

He said the mood at Pimco’s headquarters in Newport Beach, California also is good, calling it a “Happy Kingdom.”

Gross talked shop, too, giving more detail about how he is thinking about economic growth and central bank policy. In a concept he calls the “New Neutral”, Gross sees the world’s economies synchronizing to only modest growth trends over the next few years.

Gross ended his speech, though, with another thought about his image.

“Maybe I‘m not General George Patton, but just a 70-year-old version of Justin Bieber,” Gross said. (Reporting By Tim McLaughlin; Editing by Chizu Nomiyama)

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