Jeffrey Gundlach

Last updated
Jeffrey Gundlach
Born
Jeffrey Edward Gundlach

(1959-10-30) October 30, 1959 (age 64)
Alma mater Dartmouth College
Yale University
Occupation(s)Businessman, investor, philanthropist
Employer DoubleLine Capital
SpouseNancy Draper (div.)

Jeffrey Edward Gundlach (born October 30, 1959) is an American businessman, investor, and philanthropist. He is the founder of DoubleLine Capital, an investment firm.

Contents

Early life

Jeffrey Gundlach was born October 30, 1959, in Amherst, New York, [1] to parents Carol and Arthur Gundlach. His father (d. 2013) was a chemist for Pierce and Stevens Chemical Corp. [2] [3] He is a graduate of Dartmouth College where he graduated summa cum laude in math and philosophy in 1981, [4] and attended Yale University for a Ph.D. in mathematics before dropping out. [5]

Career

Gundlach was formerly the head of the $9.3 billion TCW Total Return Bond Fund, where he finished in the top 2% of all funds invested in intermediate-term bonds for the 10 years that ended prior to his departure. [4] He was fired by TCW in 2009. [6] In the aftermath, Gundlach and TCW sued each other and went to jury trial in California; TCW alleged that Gundlach stole trade secrets (TCW prevailed, but was awarded $0 for the claim), Gundlach sued over compensation claims (Gundlach prevailed, and was awarded $66.7 Million). [7]

DoubleLine Capital

In 2009, shortly after his firing from TCW, Gundlach founded Doubleline, along with Philip Barach and 14 other members of Gundlach's senior staff from TCW. [8] Barach was Gundlach's co-manager of the $12 Billion TCW Total Return bond fund. [8] In a February 2011 cover story, Barron's called him the "King of Bonds". [9]

On March 9, 2011, Gundlach was quoted on CNBC that "Munis Are The New Subprime." Referring to municipal bonds, he said: "You’ve got a history of low defaults, which is comforting. But that kind of sounds like what subprime sounded like back in 2006". Gundlach pointed out that even if defaults do not ultimately climb as high as critics like Meredith Whitney have warned, muni bonds will likely trade much lower. "Between here and the end game, lies the valley. And the valley is full of fear. I think the muni market is going to go down by at least, on the long end, something like 15 and 20 percent," he said. [10]

On March 10, 2011, Gundlach reportedly liquidated 55 percent of his personal holdings in municipal bonds. [11] At the time, Gundlach also stated: "Nobody owns California general obligation bonds because they think it's an improving credit story," he said, drawing chuckles from the audience. [11]

In 2012, he was included in the 50 Most Influential list of Bloomberg Markets magazine.

Market strategies

Negative on the US Dollar

On 11 November 2020, Gundlach remarked in an interview with Real Vision that he "was previously positive on the US dollar for six to seven years until he turned negative on the US dollar since January 2017." [13] He was quoted on CNBC, that the "dollar is doomed" and "ultimately, the size of our deficits – both trade deficits which has exploded post-pandemic and the budget deficit, which is obviously, completely off the charts – suggest that in the intermediate term — I don’t really think this year, exactly, but in the intermediate term — the dollar is going to fall pretty substantially." He further re-affirms this by stating "In the long term, I think the dollar .... [is] doomed." [14]

Personal life

He was married to Nancy Draper, a bassist in his former band, "Radical Flat" (previously known as "The Greens), [3] who filed for divorce from Gundlach in 2010 after being married for more than 20 years. [15] He currently lives in Los Angeles, California. [16]

Home burglary and recovery of art

Gundlach's Santa Monica home was burgled in his absence in September 2012. Several pieces of art were taken along with some wine, five designer watches, cash and a prized [17] 2010 red Porsche Carrera 4S. [18] Some days after the theft, Gundlach added to a $200,000 "overall" reward a $1 million reward for the Piet Mondrian painting among the missing, and a $500,000 reward for the Jasper Johns. The total value of the stolen property was put at $10 million at the time. [17] [18] Within weeks, a tip led to the recovery of the art works and arrests of suspects in the theft. The rewards—with the one for the Mondrian being termed a record for a single art work—were being said to have played a role in the recovery though no determination of payment had been made. The Porsche was still missing. [19]

Philanthropy

In 2016, Gundlach donated $42.5 million to Albright–Knox Art Gallery in Buffalo, New York, as part of their capital campaign and expansion project. [20] The gift represents the city’s largest cultural gift from an individual, according to museum director Janne Sirén. The Gallery was renamed the Buffalo Albright-Knox-Gundlach Art Museum, or Buffalo AKG Art Museum for short. [21]

Related Research Articles

In economics and finance, arbitrage is the practice of taking advantage of a difference in prices in two or more markets – striking a combination of matching deals to capitalize on the difference, the profit being the difference between the market prices at which the unit is traded. When used by academics, an arbitrage is a transaction that involves no negative cash flow at any probabilistic or temporal state and a positive cash flow in at least one state; in simple terms, it is the possibility of a risk-free profit after transaction costs. For example, an arbitrage opportunity is present when there is the possibility to instantaneously buy something for a low price and sell it for a higher price.

A municipal bond, commonly known as a muni, is a bond issued by state or local governments, or entities they create such as authorities and special districts. In the United States, interest income received by holders of municipal bonds is often, but not always, exempt from federal and state income taxation. Typically, only investors in the highest tax brackets benefit from buying tax-exempt municipal bonds instead of taxable bonds. Taxable equivalent yield calculations are required to make fair comparisons between the two categories.

<span class="mw-page-title-main">Social Security Trust Fund</span> Type of trust fund in the United States

The Federal Old-Age and Survivors Insurance Trust Fund and Federal Disability Insurance Trust Fund are trust funds that provide for payment of Social Security benefits administered by the United States Social Security Administration.

<span class="mw-page-title-main">National debt of the United States</span> Worlds largest national debt

The national debt of the United States is the total national debt owed by the federal government of the United States to Treasury security holders. The national debt at any point in time is the face value of the then-outstanding Treasury securities that have been issued by the Treasury and other federal agencies. The terms "national deficit" and "national surplus" usually refer to the federal government budget balance from year to year, not the cumulative amount of debt. In a deficit year the national debt increases as the government needs to borrow funds to finance the deficit, while in a surplus year the debt decreases as more money is received than spent, enabling the government to reduce the debt by buying back some Treasury securities. In general, government debt increases as a result of government spending and decreases from tax or other receipts, both of which fluctuate during the course of a fiscal year. There are two components of gross national debt:

<span class="mw-page-title-main">Goldman Sachs</span> American investment bank

The Goldman Sachs Group, Inc. is an American multinational investment bank and financial services company. Founded in 1869, Goldman Sachs is headquartered in Lower Manhattan in New York City, with regional headquarters in many international financial centers. Goldman Sachs is the second largest investment bank in the world by revenue and is ranked 55th on the Fortune 500 list of the largest United States corporations by total revenue. In Forbes Global 2000 2023, Goldman Sachs ranked 34th. It is considered a systemically important financial institution by the Financial Stability Board.

<span class="mw-page-title-main">Buffalo AKG Art Museum</span> Art museum in New York, US

The Buffalo AKG Art Museum, formerly known as the Albright–Knox Art Gallery, is an art museum in Buffalo, New York, United States, in Delaware Park. The museum was expanded beginning in 2021, and re-opened in June 2023.

Moody's Ratings, previously known as Moody's Investors Service, often referred to as Moody's, is the bond credit rating business of Moody's Corporation, representing the company's traditional line of business and its historical name. Moody's Ratings provides international financial research on bonds issued by commercial and government entities. Moody's, along with Standard & Poor's and Fitch Group, is considered one of the Big Three credit rating agencies. It is also included in the Fortune 500 list of 2021.

<span class="mw-page-title-main">Subprime mortgage crisis</span> 2007 mortgage crisis in the United States

The American subprime mortgage crisis was a multinational financial crisis that occurred between 2007 and 2010 that contributed to the 2007–2008 global financial crisis. The crisis led to a severe economic recession, with millions losing their jobs and many businesses going bankrupt. The U.S. government intervened with a series of measures to stabilize the financial system, including the Troubled Asset Relief Program (TARP) and the American Recovery and Reinvestment Act (ARRA).

Berkshire Hathaway Assurance is a bond insurance company created by Berkshire Hathaway, Inc. in December 2007.

A synthetic CDO is a variation of a CDO that generally uses credit default swaps and other derivatives to obtain its investment goals. As such, it is a complex derivative financial security sometimes described as a bet on the performance of other mortgage products, rather than a real mortgage security. The value and payment stream of a synthetic CDO is derived not from cash assets, like mortgages or credit card payments – as in the case of a regular or "cash" CDO—but from premiums paying for credit default swap "insurance" on the possibility of default of some defined set of "reference" securities—based on cash assets. The insurance-buying "counterparties" may own the "reference" securities and be managing the risk of their default, or may be speculators who've calculated that the securities will default.

<span class="mw-page-title-main">2000s European sovereign debt crisis timeline</span>

From late 2009, fears of a sovereign debt crisis in some European states developed, with the situation becoming particularly tense in early 2010. Greece was most acutely affected, but fellow Eurozone members Cyprus, Ireland, Italy, Portugal, and Spain were also significantly affected. In the EU, especially in countries where sovereign debt has increased sharply due to bank bailouts, a crisis of confidence has emerged with the widening of bond yield spreads and risk insurance on credit default swaps between these countries and other EU members, most importantly Germany.

<span class="mw-page-title-main">Australian government debt</span> Amount owed by the Australian federal government

The Australian government debt is the amount owed by the Australian federal government. The Australian Office of Financial Management, which is part of the Treasury Portfolio, is the agency which manages the government debt and does all the borrowing on behalf of the Australian government. Australian government borrowings are subject to limits and regulation by the Loan Council, unless the borrowing is for defence purposes or is a 'temporary' borrowing. Government debt and borrowings have national macroeconomic implications, and are also used as one of the tools available to the national government in the macroeconomic management of the national economy, enabling the government to create or dampen liquidity in financial markets, with flow on effects on the wider economy.

William Hunt "Bill" Gross is an American investor and retired fund manager, who co-founded Pacific Investment Management Co. PIMCO is a global fixed income investment company. Gross ran their $270 billion Total Return Fund (PTTRX), before leaving to join Janus Capital Group in September 2014. Gross retired from active fund management in 2019.

J. Kyle Bass is an American investor and founder of Conservation Equity Management, a Texas-based private equity firm focused on environmental sustainability. He is also the founder and principal of Hayman Capital Management, L.P., a Dallas-based hedge fund focused on global events.

Marc Stern is an American attorney, business executive and philanthropist. He serves as the Chairman of the TCW Group, an asset management financial institution based in Los Angeles, California. He also owns minority stakes in Major League Baseball's Milwaukee Brewers and the NBA's Milwaukee Bucks. Marc serves as the Chairman of the Los Angeles Opera.

The year 2016 in art involves various significant events.

<span class="mw-page-title-main">Janne Sirén</span> Finnish art historian

Janne Sirén is a Finnish art historian and the Peggy Pierce Elfvin Director of the Buffalo AKG Art Museum, formerly known as the Albright–Knox Art Gallery in Buffalo, New York. Before joining the Buffalo AKG Art Museum, Sirén served as Director and City of Helsinki Department Chief at the Helsinki Art Museum from 2007 to 2013. Prior to that, he served as Director of the Tampere Art Museum from 2004 to 2007.

<span class="mw-page-title-main">Financial market impact of the COVID-19 pandemic</span> Economic turmoil associated with the pandemic

Economic turmoil associated with the COVID-19 pandemic has had wide-ranging and severe impacts upon financial markets, including stock, bond, and commodity markets. Major events included a described Russia–Saudi Arabia oil price war, which after failing to reach an OPEC+ agreement resulted in a collapse of crude oil prices and a stock market crash in March 2020. The effects upon markets are part of the COVID-19 recession and are among the many economic impacts of the pandemic.

Mismarking in securities valuation takes place when the value that is assigned to securities does not reflect what the securities are actually worth, due to intentional fraudulent mispricing. Mismarking misleads investors and fund executives about how much the securities in a securities portfolio managed by a trader are worth, and thus misrepresents performance. When a trader engages in mismarking, it allows him to obtain a higher bonus from the financial firm for which he works, where his bonus is calculated by the performance of the securities portfolio that he is managing.

<span class="mw-page-title-main">DoubleLine Capital</span> American investment firm

DoubleLine Capital ("DoubleLine") is an American investment management firm headquartered in Tampa, Florida. It is known for its focus on investing in the bond market but also invests in other asset classes such as equities and commodities. The firm is majority owned by its employees.

References

  1. Graham, Tim (July 8, 2014). Sources: Jeffrey Gundlach exploring Bills purchase, approached Jim Kelly Archived 2014-07-13 at the Wayback Machine . The Buffalo News. Retrieved July 11, 2014.
  2. Dabkowski, Colin (30 Jun 2017). "Jeffrey Gundlach: The man behind the millions". The Buffalo News. Retrieved 7 May 2021.
  3. 1 2 Wile, Rob (May 22, 2012). "PRESENTING: The Amazing Life Of Jeff Gundlach, The World's Greatest Bond Investor". Business Insider . Retrieved 26 September 2016.
  4. 1 2 "The King of Bonds,", Barron's, February 21, 2011
  5. Elfenbein, Eddy. "The Mind of Jeffrey Gundlach". Article. Crossing Wall Street. Retrieved 1 December 2013.
  6. "Bond Star Jeffrey Gundlach to Launch New Fund," Wall Street Journal, July 29, 2011.
  7. "Jury awards Gundlach $66.7 million in TCW battle". Reuters. 2011-09-16. Retrieved 2022-09-01.
  8. 1 2 " "Jeffrey Gundlach, Bond Savant," BusinessWeek, May 10, 2012
  9. Laing, Jonathan R. (February 21, 2011). "The King of Bonds". Barron's . Retrieved 26 September 2016.
  10. "Jeffrey Gundlach: Munis Are The New Subprime". CNBC. 9 March 2011.
  11. 1 2 Reuters Editorial (10 March 2011). "Fund manager Gundlach slashes US muni holdings". Reuters.{{cite web}}: |author= has generic name (help)
  12. Sam Ro (14 January 2014). "Jeffrey Gundlach's 2014 Outlook - Business Insider". Business Insider.
  13. Jeffrey Gundlach — Waiting For The Next Big Trade (w/ Raoul Pal) , retrieved 2022-07-13
  14. Stankiewicz, Kevin (2021-07-15). "Gundlach says the dollar is 'doomed' over the long term because of rising U.S. deficits". CNBC. Retrieved 2022-07-13.
  15. Kimes, Mina (March 10, 2010). "SPECIAL REPORT:Divorce American style for French bank, bond star". Reuters . Retrieved 26 September 2016.
  16. Dabkowski, Colin (24 September 2016). "How fate, his Mom and the Garden Walk brought Gundlach's gift to the Albright-Knox". The Buffalo News . Retrieved 26 September 2016.
  17. 1 2 Britt, Russ, "Bond guru Gundlach bets big bucks to get his stolen art back", MarketWatch , September 24, 2012. Retrieved 2012-09-25.
  18. 1 2 "Multimillionaire financier victim of $10-million heist", LA Times, n.d. Includes a slide show of nine pieces of stolen art including the Mondrian (#7), the Johns (#6) and a Joseph Cornell (#8). Retrieved 2012-09-25.
  19. Bel Bruno, Joe, and Stuart Pfeifer, "Art stolen from Jeffrey Gundlach is recovered; 2 arrested", LA Times, September 27, 2012. Retrieved 2012-10-02.
  20. Martin, Susan (September 26, 2016). "Garden Walk Buffalo thrilled by billionaire's recognition". The Buffalo News . Retrieved 26 September 2016.
  21. Pogrebin, Robin (23 September 2016). "Buffalo Museum, Ready to Expand, Raises Money at Breakneck Pace". The New York Times . Retrieved 26 September 2016.