BUSINESSWEEK ONLINE : JANUARY 24, 2000 ISSUE
INTERNATIONAL -- FINANCE $40 Million a Year? That's Some Gross Income (int'l edition) When Allianz agreed to buy PIMCO Advisors LP, the first question on everyone's lips was: ''Can they hold on to Bill Gross?'' They can. But it will cost them $40 million annually over the next five years--on top of his salary--to keep PIMCO's co-founder and star portfolio manager William H. Gross, 55, on the payroll. It may be a bargain. Gross's reputation as a fixed-income fund manager is so high that PIMCO has to spend far less on advertising than its rivals, say industry sources. He gets so many requests for TV interviews that PIMCO had to set up a studio for him in its Newport Beach (Calif.) head office. Gross manages PIMCO's flagship $30 billion Total Return Fund, the biggest bond fund in the U.S. It has earned an average 9% annual return for the past 10 years--putting it in the top 5% of all bond funds, according to Morningstar Inc., the Chicago fund-tracking firm. In 1999, Gross's funds sucked in $8 billion of all-new money, around half the total of all money invested in U.S. bond funds last year. The big magnet has been his knack for getting interest rate changes right, including the 1998 cuts and the hikes in 1999. Gross made his first real money at the blackjack tables, after graduating from Duke University. He played 16 hours a day for four months, turning $200 into $10,000--a small fortune in the 1960s. After stints in the Navy and as an analyst in Pacific Mutual Holding Co.'s bond department, he helped found PIMCO in 1971. Allianz can only hope that if loyalty doesn't keep him there, the extra $200 million will. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP					RELATED ITEMS Henning Schulte-Noelle: Europe's Player (int'l edition) TABLE: What Is Allianz's Next Move? TABLE: How Allianz Stacks Up $40 Million a Year? That's Some Gross Income (int'l edition) PIMCO: A ``Quantum Leap'' for Allianz (int'l edition) INTERACT E-Mail to Business Week Online

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