Finally, we have the full Jeffrey Gundlach story.
Thanks to FORTUNE hot shot writer Mina Kimes, there’s now depth to the wild tale of how Gundlach — whose only peer in bond investment is perhaps PIMCO’s Bill Gross — went from being the star manager of $70 billion at TCW to being fired and sued for all sorts of nasty things.
As we noted in January, Gundlach was accused by TCW of misappropriating trade secrets; interfering with the firm’s contractual relationships with clients; committing civil conspiracy; and, for good measure, for keeping marijuana, sex “devices,” and dozens of pornographic magazines and videos in his office. (DoubleLine, Gundlach’s new firm, called the allegations “meritless.”)
But how did all that come to be? FORTUNE lets us in.
First, there’s the interesting background on Gundlach:
In his mid-twenties Gundlach played drums in a variety of rock bands that performed in L.A. clubs but never made the big time. Meanwhile he was holding down a dreary day job in the actuarial department at Transamerica. One night in 1985 he was watching an episode of “Lifestyles of the Rich and Famous,” that described the most lucrative careers. Gundlach decided he would, as he told one interviewer, “figure out my life.”
Next, there’s his amazing success at TCW, where he beat virtually all the competition:
His flagship $12 billion TCW Total Return Bond Fund returned nearly 8% annually over the past decade. Those results beat 99% of competitors, and his nonpublic funds have done even better.
But, as Kimes notes, his ego can make him a difficult boss:
Many outside Gundlach’s orbit viewed him as an ill-tempered bully. He subjected subordinates to withering cross examinations and relished pointing out errors. Some in TCW’s New York offices celebrated his dethroning by posting printouts of his scathing e-mails in the halls.
Then there’s just how nasty the split between Gundlach and TCW was, especially the moment he was fired.
He stormed out of the room and began walking down the stairs. Quinn and Cahill trailed him, thinking he was headed for the trading floor one level down, but Gundlach kept going. It was a surreal procession, says Quinn; they marched down 17 stories in total silence. The lawyers followed Gundlach out of the building and onto the street until Gundlach finally turned around and told them he wasn’t planning on stopping anytime soon.
While all this was happening, chaos had erupted on TCW’s trading floor. CEO Stern sent out a companywide e-mail announcing Gundlach’s termination and the acquisition of MetWest. Then Stern appeared to reiterate the news in person. Analysts watched in shock as a team of private detectives and attorneys descended. Gundlach’s suspected conspirators were herded into offices and conference rooms, where the investigators interrogated them and seized laptops and records…
Don’t stop here. Read the full Kimes profile of Gundlach at FORTUNE.
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