DoubleLine bond fund reaches $1-billion mark

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DoubleLine Capital, the L.A. money management firm founded by ex-TCW Group executive Jeffrey Gundlach in December, said Friday its flagship bond mutual fund had passed the $1-billion-asset threshold.

It may become an important milestone for Gundlach as he seeks to lure investors who had invested with him at TCW before the firm ousted him in a bitter breakup on Dec. 4.

The DoubleLine Total Return Bond fund has been the fastest-growing new mutual fund of 2010, according to Morningstar Inc. The fund, which invests mostly in mortgage-backed securities, was launched on April 6 and is up 7.4% since then, according to Bloomberg News data.

It has far outpaced the nation’s biggest bond fund, Pimco Total Return, which is up 2.4% since April 6.
Gundlach, 50, got some high-profile fund industry exposure this week when he gave the keynote address at Morningstar’s annual investment conference in Chicago. He gave a bearish view of the economy, predicting a double-dip recession.

Gundlach had been TCW’s chief investment officer -- and star bond fund manager -- before the firm fired him, alleging that he had threatened to leave and take his investment team with him. Within days of his ouster Gundlach formed DoubleLine; within weeks, more than 40 of his TCW co-workers had jumped ship to join him.

TCW and Gundlach have since sued each other. TCW, which managed about $115 billion as of March 31, alleges that Gundlach stole proprietary information to help launch his new venture; Gundlach alleges that TCW fired him to avoid having to share as much as $1.25 billion in fees from assets Gundlach oversaw.

The TCW Total Return Bond fund, which had been the firm’s flagship mutual fund under Gundlach, reached $12 billion in assets last year before he was fired. Many investors fled the fund after his ouster; the portfolio now holds about $5 billion.

With the new DoubleLine Total Return Bond fund, Gundlach has been hoping to attract more of the money that was yanked from the TCW fund. A chunk of that cash is believed to have gone to the Pimco fund.

-- Tom Petruno