By STEVE ROTHWELL, AP Markets Writer

Posted: 09/26/14, 6:55 AM PDT | Updated: on 09/26/2014

NEW YORK Bill Gross, who co-founded and led the giant fund manager Pimco for more than four decades, is leaving the company to join Janus Capital.

Investors have been pulling money out of Pimcos Total Return Fund, the worlds biggest bond fund, for more than a year over worries about Gross ability to continue to deliver big returns. Investors have also been rattled by reports of a regulatory probe into the way Pimco has been valuing bonds in a smaller fund and by management turmoil at the company. In January, Grosss heir apparent, Mohamed El-Erian, abruptly resigned.

Gross will help open a Janus office in Newport Beach, California, focusing on fixed-income strategies.

Pimco said in a statement that it had a succession plan in place and a deep bench of talent that would help it cope with Gross departure.

Gross trounced rivals for years with deft moves in and out of bonds, pulling in hundreds of millions of dollars from investors. But lately theyve been fleeing. Theyve pulled money out of the Total Return fund for 15 months in a row, according to S&P Capital IQ.

The fund lost 2.3 percent last year, its first loss in more than a decade, according to S&P Capital IQ. This year, it has returned 3 percent.

Gross was one of the founders of Pacific Investment Management Co. or Pimco, in 1971, and helped build the Newport Beach, California-based investment company into one of the worlds largest bond managers. Today, the company manages almost $2 trillion in assets.

Gross and El-Erian, co-chief investment officer before his departure, helped steer the company through the tumult of the financial crisis. The two helped develop Pimcos concept of the new normal a widely cited idea that economies will grow more slowly after the crisis and big investment returns will be hard to come by.

While we are grateful for everything Bill contributed to building our firm and delivering value to PIMCOs clients, over the course of this year it became increasingly clear that the firms leadership and Bill have fundamental differences about how to take PIMCO forward, PIMCOs Chief Executive Officer Douglas Hodge said in a statement.

Gross will join Janus at the end of the month and manage the companys recently launched Unconstrained Bond Fund, Janus said in a statement. He starts at the company on Monday.

Advertisement

Janus Capital Groups stock soared $3.20, or 29 percent, to $14.31 following news that Gross would be joining the firm.