In January, PIMCO Co-CEO Mohamed El-Erian abruptly left the company that he managed along with legendary bond trader Bill Gross.
There was all kinds of speculation as to why, ranging from the garden variety desire to do something else to it having something to do with PIMCO’s mediocre performance, or perhaps even personality clashes with Bill Gross.
Now we know that it was indeed the clashes, and frankly they’re embarrassing for Gross.
Greg Zuckerman and Kirsten Grind report at the WSJ that one day last summer, Gross and El-Erian clashed in front of several people:
“I have a 41-year track record of investing excellence,” Mr. Gross told Mr. El-Erian, according to the two witnesses. “What do you have?”
“I’m tired of cleaning up your s — ,” Mr. El-Erian responded, referring to conduct by Mr. Gross that he felt was hurting Pimco, these two people recall.
At another point, Zuckerman and Grind report, Gross referred to himself as “Secretariat” (the name of the famous race horse) and said he could run the entire fund without El-Erian.
Felix Salmon argues that after this article, Gross will never be seen the same way again, and that it’s time for him to retire. Perhaps, though it’s not that weird for egos and tensions to run hot from time to time at this level. Still it’s embarrassing, and after a period of poor performance, hearing Gross refer to himself in such exalted terms is not confidence inspiring.