By James Saft
(Reuters) – Judging by the Bill Gross affair, the Great Man theory is alive and well among investors.
This demonstrates nothing more clearly than on what slender offerings the investment industry, with all its billions spent on people, processes and strategy, actually earns its money.
Gross, a 70-year-old with a fabulous long-term record of performance as a bond manager but some rocky recent data, resigned suddenly on Friday from Pimco to jump to smaller rival Janus Capital, a move reports said came just before he was to be dumped.
This led to several striking outcomes: Analysts began to predict mass redemptions by Pimco investors, with estimates ranging from between 10-30 percent of its funds under management over the next several years, or potentially a number approaching a half a trillion dollars.
Shares in Pimco parent Allianz [ALLI.UL], a German financial services company, fell more than 6 percent in reaction as investors discounted outflows from a unit that accounts for about a quarter of the group’s operating profits.