TCW vs. Gundlach: Who are the Feds really after?

December 15, 2010: 11:37 AM ET

The battle between bond manager Jeffrey Gundlach and his former firm, TCW, is getting even more muddled after revelations of a government inquiry.

By Mina Kimes, writer

Jeffrey Gundlach

Jeffrey Gundlach, the center of the storm

More than a year has passed since L.A. money management firm TCW fired its star investor, Jeffrey Gundlach, but their bitter feud, chronicled in Fortune earlier this year, shows no signs of cooling off. Both sides, who are still mired in a legal battle, said last week that they are also involved in a federal investigation -- but they disagree about the reason for the probe, sparking yet another public dispute.

The TCW-Gundlach saga began last December, when the investment firm, which has about $110 billion in assets under management, fired Gundlach and announced that it was acquiring another L.A. investment firm, Metropolitan West Asset Management. The news stunned the mutual fund world: Gundlach, who is reputed in investing circles for both his mortgage bond expertise and his outsized personality, was overseeing more than half of TCW's money at the time. He was also one of the nine fund managers picked by the U.S. Treasury to run a Public Private Investment Program (PPIP) fund, a venture in which TCW would purchase toxic securities on behalf of both the government and private investors.

After Gundlach was fired, about forty of his colleagues followed him out the door. Days later, he announced that they were starting a new fund company, DoubleLine Capital. More

  • Watchdog flags Treasury for toxic asset 'confusion'

    A Treasury program to take toxic assets off bank balance sheets was plagued by inconsistency, a government watchdog said.

    Thursday's report from the Special Inspector General for the Troubled Asset Relief Program, Neil Barofsky (right), assesses how Treasury chose fund managers for a high-profile effort to ease the credit crunch.

    The program, known as the Legacy Securities Public Private Investment Partnership, or PPIP, eventually selected nine firms that raised some $30 billion MORE

    - Oct 7, 2010 12:02 AM ET
  • PPIP gathering steam

    A year after its launch, a government program to take troubled real estate assets off bank balance sheets is slowly gaining steam.

    The eight investing partnerships taking part in Treasury's Legacy Securities program have poured $16 billion into troubled residential and commercial real estate loans, Treasury said this week. That's up from $10 billion at the end of March and just $4 billion at the end of last year.

    Some 83% of MORE

    - Jul 21, 2010 10:28 AM ET
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