William Gross Leaves Pimco to Join Janus

William H. Gross, who built Pimco into one of the largest money managers in the world and has been called 'the bond king,' has quit the firm he founded and will join Janus Capital.

The surprising departure follows months of questions about his leadership style and his funds' performance as investors pulled money out of Pimco. In addition, the Securities and Exchange Commission has begun an inquiry into whether a $3.6 billion exchange traded fund actively managed by Mr. Gross inflated its performance numbers.

At Janus, Mr. Gross will manage a recently started Janus Global Unconstrained Bond Fund and related strategies, and will join Myron Scholes and other members of the Janus team focused on global asset allocation. He will be based in a new Janus office to be established in Newport Beach, Calif.

In statement, Mr. Gross said: :I look forward to returning my full focus to the fixed income markets and investing, giving up many of the complexities that go with managing a large, complicated organization. 'I chose Janus as my next home because of my long standing relationship with and respect for CEO Dick Weil and my desire to get back to spending the bulk of my day managing client assets.'

Regulators are looking into whether Pimco inflated the returns of an actively traded $3.6 billion exchange traded fund that mirrors the bond giant's flagship fund.