How Much Is Bond King Jeffrey Gundlach Worth?

How Much Is Jeffrey Gundlach Worth? Many investors add bonds to their portfolios as an afterthought. They consider bonds a safe, unexciting companion to the far more exhilarating adventure of stock trading, and they only buy bonds to hedge against the volatility of stocks.

However, some of the world’s best investors know that the bond market can be just as exciting as the stock market. They understand the nuances of bond trading, and they have developed investment strategies that built multi-billion dollar fortunes.

Jeffrey Gundlach, named the Bond King by Barron’s Magazine in 2011, is one such investor. He put his passion for mathematics to work on unraveling the intricacies of successful bond trading, and he turned that into a lucrative career.

Gundlach cemented his reputation as a market visionary when he predicted the 2007 housing crash. Today, he is a regular guest on business news programs where he shares his insight and guidance on maneuvering through tricky economic times.

Who Founded DoubleLine?

Jeffrey Gundlach founded DoubleLine Capital LP in 2009, and he has served as its CEO since the firm’s opening day. However, that isn’t where his career began. After graduating from Dartmouth College with degrees in mathematics and philosophy in 1981, Gundlach tested a handful of career paths before settling in at the prestigious asset management firm, TCW Group.

According to legend, Gundlach decided to pursue the position after watching an episode of Lifestyles of the Rich and Famous. After growing up in a middle-class family, he was astonished to learn how much money could be made in the world of investing, and he wanted to be a part of that world.

It didn’t take long for Gundlach to demonstrate his skill at predicting the future of the bond market. He was made co-manager of the TCW Total Return Bond Fund, which had roughly $10 billion in assets under management, and he was wildly successful in delivering returns for the fund. For the ten year period from 1999 – 2009, his fund was in the top two percent of all intermediate-term bond funds.

In 2009, TCW Group terminated Gundlach’s employment, later alleging that he stole trade secrets from the company. After his departure from the firm, TCW sued Gundlach and won – but it was a hollow victory. No damages were awarded to TCW. Gundlach counter-sued TCW, claiming he was owed compensation. He also won, and TCW was required to pay $66.7 million in restitution.

The disastrous end to his relationship with TCW Group didn’t sour Gundlach on bond trading. He started a firm of his own, DoubleLine Capital LP, poaching the co-manager of the TCW Total Return Bond Fund and more than a dozen other senior TCW staff.

How Did Bond King Jeff Gundlach Make His Money?

California-based Doubleline Capital LP started as a small investment management company, but Gundlach’s success quickly attracted new clients. The firm’s assets under management now top $140 billion.

The Doubleline family of mutual funds, closed-end funds, and exchange-traded funds (ETFs) focuses heavily on bonds, which is in line with the firm’s simple mission: to offer investment services under a cardinal mandate – deliver better risk-adjusted returns while avoiding the risk-taking that historically has led to principal losses.

In other words, Gundlach’s goal is to give his clients the high returns typically found in the stock market without the risk associated with growth stocks.

While Jeff Gundlach was certainly considered wealthy during his time with TCW, it wasn’t until he launched his own firm and continued to deliver strong results that he made it onto the Forbes list of billionaires. Doubleline was instrumental in helping Bond King Jeff Gundlach make his money.

How Much Is Jeff Gundlach Worth?

Jeff Gundlach crossed into billionaire territory in 2015 with a net worth of $1.1 billion. That figure continued to go up, and today Jeff Gundlach’s net worth is estimated at $2.2 billion. This is primarily due to his focus on bond trading – and the fact that he is delivering returns for his clients.

Though Doubleline has some passive funds, most are actively managed. That means they can charge higher fees, which translate into larger profits for the firm and Gundlach himself. The fact that Doubleline is still attracting business to its actively-managed funds speaks to the firm’s tremendous accomplishments.

Many other actively-managed funds have lost investors to low-fee passively-managed funds because the returns were comparable. That is not so with Doubleline. Investors have realized substantial value from the additional expense they pay for active management.

In a 2018 interview with Forbes, Gundlach explained how he adds value for his clients:

• Determine an optimal amount of credit risk based on external economic factors

• Balance treasury bonds and government guaranteed bonds with other assets

• Select the ideal level of interest rate risk

• Choose which company’s debt to purchase based on financial and other data

Gundlach’s ability to build his multi-billion dollar fortune was based in large part on his long record of delivering returns by adding value for his clients.

Jeffrey Gundlach Portfolio

Jeffrey Gundlach’s portfolio isn’t public information, but it is reasonable to assume he invests most of his wealth in Doubleline funds. Each fund takes a slightly different approach to achieving its goals, with some focusing on income, others bringing in bonds from emerging economies, and a handful that are primarily concerned with bond maturity dates.

A good example of portfolio holdings can be seen in the Doubleline Core Fixed Income Fund, which includes hundreds of bonds from many different borrowers. From a credit quality perspective, investment-grade bonds make up the largest portion of the portfolio, followed by government bonds.

Most assets in the portfolio have a lifespan between five and ten years. From a sector perspective, the two largest bond types include government bonds at just over 20 percent of the portfolio and Investment Grade Corporates at nearly 16 percent of the portfolio.

One of the key points Gundlach makes during any discussion of his portfolio and the Doubleline family of funds is that what is in the portfolio at any given moment isn’t the only factor that determines returns. Keeping a close watch on macroeconomic conditions and making appropriate trades within a small window of opportunity makes the difference between average and exceptional returns.

Jeffrey Gundlach Predictions

Jeffrey Gundlach makes his money – and makes money for his clients – by accurately predicting what the market and larger economy will do next.

In a best–case scenario, he is able to make those predictions and act on them before anyone else. Once he has taken action to manage his own interests, Gundlach is generous with sharing his insights publicly through appearances on business news programs.

At the moment, Gundlach is focused on how the Federal Reserve is managing interest rates. On February 1, 2023, another increase was announced, which adds to the large increases that occurred throughout 2022.

Gundlach responded to the announcement with his prediction that there will be – at most – one more rate increase. He expects a recession later in the year, at which point, he predicts the Fed will reconsider its strategy. Gundlach said that it is likely the rate increases will stop, but he isn’t yet ready to predict with certainty that interest rates will go down by the end of the year.

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