Monday, December 7, 2009

TCW bond fund managers quit after firm ousts investment chief

L.A. money manager TCW Group is facing defections by some of its top bond fund talent after the firm on Friday fired Jeffrey Gundlach, its veteran chief investment officer.

Some of the managers who worked directly with Gundlach for the last two decades in TCW’s fixed-income group resigned on Saturday despite the firm’s efforts to keep them.

Those departing included Philip Barach and Louis Lucido, two senior managers of TCW’s mortgage-backed securities portfolios. Barach also was co-manager, with Gundlach, of TCW’s $12-billion-asset Total Return Bond fund, the firm’s top-performing mutual fund.

Reached at their homes, Barach and Lucido confirmed their resignations. A TCW spokeswoman said that the company was “working to retain key employees” but declined to comment further.

In a surprise move on Friday TCW simultaneously announced that it had fired Gundlach and that it was buying smaller L.A. rival Metropolitan West Asset Management. TCW said Tad Rivelle, Metropolitan West’s chief investment officer, would take over Gundlach’s role overseeing high-quality bonds, including mortgage-backed securities.

Gundlach, 50, has long been a star of the mortgage-bond world, racking up hefty returns both before and after the housing market bust. His expertise in mortgage securities helped make TCW one of the country’s biggest managers of fixed-income securities. The bulk of the firm’s $110 billion in assets are in bonds.
-- Tom Petruno, Los Angeles Times