NEW YORK (TheStreet) -- With Janus Capitala hire of "Bond King" Bill Gross, the longtime equity mutual fund manager has announced its goal to become a top global player in fixed income. Janus' $29 billion fixed income portfolio is dwarfed by the holdings of PIMCO, one of the world's largest fixed income managers with over $2 trillion in assets. The market clearly liked the move with Janus shares rising more than 30.8% to $14.53 in mid-morning trading Friday. Still, the hire comes at a risky time, with most observers expecting the Federal Reserve to begin raising interest rates mid- to -late next year, suggesting a multi-decade bull run for bonds may finally be coming to a close. Also, Gross joins Janus with PIMCO, the firm he founded, under a cloud. Performance has struggled of late and a very public dispute between Gross and his one-time protege, former CEO Mohammed El-Erian, led to El-Erian's departure in January. PIMCO is also being investigated by the Securities and Exchange Commission over potentially inflating exchange traded fund performance, according toareports by The Wall Street Journal and Bloomberg, among others. An email to a PIMCO spokesman was not immediately returned. Must Read:aBill Gross Departs PIMCO Amid 'Fundamental Differences' Over Leadership A Janus spokesman had no immediatearesponse. Despite PIMCO'sarecent difficulties, aafirm that has been so much a part of Gross'aidentity for decades, the so-called "Bond King"ais probably the closest thing the bond industry has to a celebrity, a status that only benefited from his reputation for sometimesaeccentric public behavior. And flows into bond funds remain substantial. For three months ending in July U.S. taxable bond funds saw more inflows than any other fund category, according to a Morningstar report last month. The timing of Gross in moving to Janus "could be brilliant or terrible," Michael Lipper, a fund industry veteran who is now president of investment adviser Lipper Advisory Services, which owns Janus shares on behalf of clients. "I don't know the level of patience on his part or Janus' part if it's terrible." Janus had already made a formidable step into bonds with its hiring of former PIMCO executive Richard Weil as CEO in 2010. Still, says Lipper, "the shop is still basically an equity shop. It does not have the same distribution or institutional pattern that PIMCO has." Founded in 1969, Janus rode the booms and busts in equity markets for several decades but has struggled to transform itself into a more stable fund manager in recent years. Clearly this latest move took Janus followers by surprise. Following a recent meeting with Janus management, Keefe Bruyette & Wooks analyst Robert Lee wrote in a Sept. 17 report thata"management does notaexpect much if any additional personnel change."a In a followup note Friday, Lee wrote, "we suspect that some assets could follow Gross to Janus, but this is impossibleato quantify that at this point." He added that "there could be some hefty upfront costs to get Gross to leave Pimco, a firm he started and at which he very well paid, as well as costs of building out a new team." Must Read:aMohamed El-Erian Abruptly Resigns as PIMCO CEO Follow @dan_freed
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