Money & Company

Tracking the market and economic trends
that shape your finances.

« Previous Post | Money & Company Home | Next Post »

More brain drain from TCW: Mutual fund chief leaves for new rival DoubleLine

December 18, 2009 |  3:08 pm

DoubleLine LLC, the L.A. money management firm launched by star bond fund manager Jeffrey Gundlach after his ouster from TCW Group on Dec. 4, has hired away the head of TCW’s mutual funds arm -- bringing to more than 40 the number of TCW staffers who’ve jumped ship in two weeks.

Ron Redell, who had directed TCW’s fund business since 2005, will be president of DoubleLine’s planned mutual fund unit, Gundlach said.

Redell, 39, is credited with the marketing program that built up TCW’s flagship mutual fund, Total Return Bond, which under Gundlach became one of the top-performing fixed-income funds of the last decade. The fund’s assets soared from $250 million in 2004 to $12 billion by late November, before Gundlach was sacked.

Redell “I just looked at this as a tremendous opportunity,” Redell said of Gundlach’s new firm. He declined to comment on whether TCW tried to keep him.

TCW’s mutual funds held about $16 billion in total assets in November, a relatively small chunk of the firm’s $110 billion in assets. Most of the money TCW oversees is from institutional investors such as pension funds.

In an ugly breakup that stunned Wall Street, TCW said it fired Gundlach -- a 24-year veteran of the firm and a nationally known authority on mortgage-backed securities -- because he had threatened to leave and take his staff with him.

Obviously figuring that many of Gundlach’s 65-member bond team would follow him, TCW made a preemptive strike when it ousted him, buying rival L.A. bond fund manager Metropolitan West Asset Management to take over Gundlach’s portfolios.

Nearly two-thirds of Gundlach’s team has defected to DoubleLine. This week, Luz Padilla, who managed the $140-million-asset TCW Emerging Markets Income fund, joined DoubleLine.

Gundlach launched DoubleLine on Monday, saying he expected to quickly attract billions of dollars from institutional clients and that he intended to offer retail mutual funds as well.

A TCW spokeswoman declined to comment specifically on Redell, but said, “We are making every effort to retain fixed income staff.”

She said TCW “fully expected some resignations, which is precisely why nearly 30 Met West investment professionals became employees of TCW on December 4.”

Besides losing most of its bond team, TCW has suffered heavy cash outflows from the Total Return Bond fund since Gundlach was fired and Met West took the helm of the fund. Morningstar Inc. estimated on Wednesday that investors had pulled about $4 billion of the fund’s assets, or about one third of the total, since Dec. 4.

-- Tom Petruno

Photo: Ron Redell. Credit: Jamie Rector / DoubleLine

Comments 

Advertisement










Video