NEW YORK (Reuters) – Jeffrey Gundlach, the ousted investment chief of TCW Group Inc., told Reuters on Thursday he has attracted at least 39 TCW employees to his new firm, DoubleLine LLC.
Assets in TCW Group Inc’s Total Return Bond Fund (TGLMX.O) have droppped by $4.76 billion since Gundlach was fired on December 4, to $7.26 billion as of December 16, according to mutual-fund tracker Morningstar.
Erin Freeman, spokeswoman for TCW, declined to comment on the asset decrease but did confirm 40 employees have resigned from the firm since Gundlach’s firing.
Gundlach, who had worked for TCW since 1985 and was recently named a finalist for fund manager of the decade by mutual-fund tracker Morningstar, said in an interview that DoubleLine has attracted “the best part” of the fixed-income and mortgage group at TCW. He had helped oversee more than $60 billion at TCW and is credited for building the firm’s successful mortgage-backed securities business.
Additional TCW clients, including pension funds and endowments, are considering withdrawing funds from TCW.
Bobby Beale, chief investment officer at the Louisiana State Employees Retirement System, told Reuters: “LASERS is currently evaluating the situation and will discuss it with LASERS’ Board of Trustees to decide the appropriate course of action.”
Beale said the pension fund has separate institutional accounts for its two mortgage portfolios that are not affected by the redemptions taking place on the TCW mutual fund side.
TCW, in a letter signed by its chief executive officer Marc Stern over Gundlach’s firing, had said that Gundlach “threatened to take certain actions that could have jeopardized the firm’s ability to manage clients’ fixed-income assets.”
Subsequently, TCW announced it would buy smaller fixed-income rival Metropolitan West Asset Management, or MetWest, in a transaction expected to close in the first quarter of 2010.
Gundlach disputed the assertion by Stern, saying he had heard TCW and its parent company, Paris-based bank Societe Generale, wanted to fire him. He went to TCW on Sept. 3 with a $700 million buyout offer and never heard back, Gundlach said.
“I made the offer to Marc Stern with several other people in the room who can confirm the offer was made,” Gundlach said. “Stern said he would show it to Paris but I never heard back.”
(Reporting by Jennifer Ablan; Editing by Andrew Hay)